10 Biggest Estate Planning Mistakes


From Financial Planning Magazine

1. Procrastination

While some of us would like to think to think we’re immortal, the time will come where all of us will have to eventually meet our maker. That’s why it’s important for advisors to push their clients to have their own estate plan, before it’s too late, and state laws intervene by creating one for them.

2. DIY Mentality

While a “do-it-yourself” mentality is admirable, it is often wise for clients to seek a professional advisor or lawyer when treading the murky waters of estate planning.

3. Failure to Think From all Angles

Sometimes clients get too invested in a particular planning approach, and forget to look at the big picture. While advisors should offer solutions to clients, they should also provide clients with “what-if” scenarios, so that they are fully prepared for what might go wrong.

4. Divorce

Often clients do not take into the account that they might get divorced. As a contingency, clients can place restrictions on the money in the trust being distributed outside of the family. Or they could use a discretionary distribution standard which gives discretion to the trustees.

5. Missing the Fine Print

As with any other legal document, the fine print in estate planning documents can be the difference between retirement in the Bahamas or in a trailer home. To avoid being manipulated by the fine print, make sure the client and estate planning attorney has dotted every “i” and crossed every “t.”

6. Forgetting Pets

Sometimes, clients forget to consider pets, and so when they die, their pets often have to follow them to their grave. Set up a pet trust to care for animals after the client dies.

7. Failure to Update ALL Documents

Failure to update or title clients’ other documents may prove to erase any benefits estate planning documents might have to offer. Make sure the client re-titles the assets in the name of the trust, not themselves, for clarity. And check regularly to ensure that beneficiary designations on all retirement documents are up-to-date. (You might not want that $1 million to go to your ex-wife anymore)

8. Underestimating Trusts

Some clients assume that trusts are only for minor children. In actuality, trusts are asset protection vehicles for the entire family, and can protect the assets from the claims of creditors.

9. Failure to Consider Digital Assets

When a client dies, their spouse/ heirs may not have access to the password for digital assets. As a result, there’s value that they can’t get to. To prevent this, make sure clients have a list of all their online user names/ passwords, and that the appropriate family member or trustee has access to the information.

10. No passing on of Digital Libraries & Music Collections (Yet)

As of the writing of this, clients cannot pass down to heirs their digital libraries and music collections, due to terms of service of the major sellers of digital content. While this may change in the future, clients will just have to accept this fact for now.

Arie J. Korving, CFP Co-founder, Korving & Company 3


Arie J. Korving, a CERTIFIED FINANCIAL PLANNER™ professional, has been delivering customized wealth management solutions to his clients for more than three decades. Prior to co-founding Korving & Company, he was First Vice President with UBS Wealth Management and held management positions with General Electric.

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