January is the month to review finances, prepare to file taxes and review estate planning documents. It’s often the time when estate planning mistakes become evident, according to an article “12 Estate Planning Mistakes Families Discover Too Late in January” from Saving Advice. Here’s what you need to know about these simple mistakes.
Not updating a Will after big life events. If your Will was done more than five years ago, it needs a review. You’ll want to meet with an estate planning attorney to update it. If your life is like most, you’ve welcomed a new child or grandchild, divorced or remarried (or both). Even if your own life hasn’t changed, laws have changed, and your Will needs to be updated to avoid disputes arising from out-of-date estate planning documents.
Beneficiary designations clashing with Will instructions. Certain accounts, like retirement accounts, pensions and insurance policies, pass directly to the people named as beneficiaries on the documents, no matter what is stated within the Will. The solution is simple—review any accounts with beneficiary designations annually to ensure that financial documents align with your Will.
Not planning for digital assets. Cryptocurrency, websites, social media, photos and online financial accounts are often overlooked when creating estate plans. Courts will not automatically grant access to online accounts, even if an Executor has usernames and passwords. Having clear language within your Will for your Executor to handle your digital assets is a must in today's digital world.
Real estate property may require specific instructions. Real estate can be a significant part of an estate and one of the most contentious assets. Clear instructions and a plan for costs will preserve a legacy, if it is your desire for the real estate to be given to a certain beneficiary.
Failing to fund Trusts. Trusts only work if they are properly funded. Unless assets are transferred into Trusts, the purpose of creating the Trust is lost.
Vague phrases for personal property. Families often quarrel about personal property with sentimental value. A phrase like “divide fairly” may lead to fights. A specific list of bequests is better if you have specific items to go to specific individuals, or consider giving gifts during your lifetime.
Failing to Plan for a Beneficiary with Special Needs. Testators must keep in mind the physical and mental health of their intended beneficiaries. If a beneficiary is on public and/or governmental assistance, leaving assets to that individual outright may cause the beneficiary to lose their assistance. Proper planning to ensure that the beneficiary can receive an inheritance and maintain their assistance is key.
No plan for long-term care costs. Seventy percent of Americans will need some kind of long-term care after they’ve turned 65. Without prior planning, assets can be quickly depleted. If the family has assets left unprotected, a legacy can be lost to nursing home costs.
Executors who aren’t prepared or willing to serve. Executors must be trustworthy, reliable and willing to administer an estate. Select the right person, then confirm their willingness to serve. Be sure to name alternate Executors.
Unequal distributions with no discussion. Many situations call for unequal distributions within a Will, such as when one child has received a down payment on their home from a parent, while the other hasn’t needed any financial help. However, talking about unequal distributions while living goes a long way toward reducing emotional fallout and the inevitable “Mom always liked you better” squabbles.
Neglecting tax planning. An inheritance cut dramatically by taxes is a lot of work and grief for little return. An estate planning attorney can help structure the estate to minimize taxes.
No Powers of Attorney (financial and healthcare). A completed estate plan addresses inability to act on your own or incapacity with these documents to give chosen people the authority to act on your behalf. Without them, families must go to court to make financial and medical decisions.
Whatever you discover when reviewing your previous estate plan, an experienced estate planning attorney will make it right to protect you and your loved ones.
Reference: Saving Advice (Dec. 3, 2025) “12 Estate Planning Mistakes Families Discover Too Late in January”
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