In this article, Robin Sherwood, CFP®, a Connecticut-based Principal at HTG Advisors, walks through the most common estate planning mistakes families make, from skipping the plan altogether to letting beneficiary designations go stale, and what to do instead.
Estate planning isn’t exactly dinner table conversation. It’s one of those things everyone knows they should do, like exercising or eating more vegetables, but somehow never gets around to doing.
Here’s a sobering statistic: 56% of Americans have none of the core estate planning documents: a will, trust, medical directive, financial power of attorney, or HIPAA authorization.1
What’s even more surprising is that this applies to everyone, across all age groups, professions, and income levels. Even estate planning attorneys and financial advisors themselves often don’t have their own plans in order.
The consequences of not planning (or planning poorly) are unfortunate and avoidable, and the stakes are high. It could result in family strife, paying more in taxes, or having the wrong person raise your children or inherit your wealth.
Let’s walk through the biggest estate planning mistakes people make, and more importantly, how to avoid them.
Mistake #1: Not Having an Estate Plan at All
This is the granddaddy of all mistakes. Many people think, “Everything’s going to my spouse anyway” or “My kids will figure it out.” But here’s the reality: if you don’t create an estate plan, someone else already has: your state legislature.
And they may not have your best interests at heart.
Without a plan, everything goes through court (probate). This means more costs, more delays, more red tape and less privacy. The court system will determine who raises your children if something happens to you. It might not be the person you would have chosen. It could be the first relative who shows up at the courthouse and makes a convincing argument to the judge.
Your children might receive their inheritance at 18, an age when most people aren’t equipped to handle significant wealth responsibly. Without your guidance in a trust, there’s nothing stopping them from making poor financial decisions.
Do some research, find a reasonably priced attorney, and protect your family. Don’t delay any longer.
Mistake #2: Thinking DIY Estate Planning Is the Solution
Some people recognize the need for estate planning. They just try to handle it themselves in ways that can backfire. Three DIY approaches come up again and again, and each one carries risks that aren’t obvious until it’s too late.
Putting Everything in Joint Name
A common approach for couples is to put everything in joint name, which is a reasonable strategy, as long as it is executed across all assets. The caveat is that while it might work when you are both alive, the surviving spouse will ultimately need an estate plan that doesn’t rely on joint ownership. Why delay the inevitable? Why not get a plan in place that doesn’t “kick the can” down the road until one of you dies?
Titling Accounts as TOD or POD
Another popular DIY technique is to title an account as TOD (transfer on death) or POD (payable on death). Here you stipulate a beneficiary to inherit that specific account, bypassing your will. Again, it might be appropriate, but that inheritor is going to inherit the money in the account and not be required to pay any of the costs of the estate, such as funeral expenses, income taxes, and other final bills or any specific will bequests. If the inheritor and the executor are the same, it might be fine, but as the class of inheritors increases, problems emerge.
Adding a Child’s Name to Property or Accounts
The last approach involves putting a child’s name on property or bank accounts to “avoid probate.” This seems simple, but there can be unintended consequences.
Here’s a real-world example: A parent puts their house in their child’s name, thinking this would make things easier when they passed away. The parent died, and the child sold the house and split the proceeds with their sibling as instructed.
A few years later, that child had to file for bankruptcy. The bankruptcy trustee discovered the recent sale and demanded some of that money back to pay the child’s creditors. The sibling who had received their share was now being pursued for money they thought was rightfully theirs.
The parent never could have imagined this scenario. But when you put someone else’s name on your assets without proper planning, you expose those assets to that person’s creditors, divorces, and lawsuits.
Not to mention that the parent increased the tax burden for their children. Gifts given during your lifetime retain your cost basis, whereas at death, assets in your name are “stepped up” and capital gains eliminated. For this reason, it can be a big mistake to transfer a highly appreciated house before death.
Mistake #3: Never Updating Your Estate Plan
Pat yourself on the back if you’ve got an estate plan, but if you haven’t revisited it in ten years, it is time to do so. Families change and members pass away. Uncle Fred may not be the best choice to be your executor/POA/guardian/trustee any longer.
Did you move to a new state, have a child or grandchild, experience a divorce, or lose a family member or someone you had previously named as trustee or executor? These are all reasons to revisit your estate documents.
State estate law is constantly changing, as are the tax implications of inheritance. Federal and state estate taxes have changed multiple times in the last decade. Rules regarding inheriting retirement accounts changed materially in 2020.
If your estate plan was created more than 10 years ago, it probably doesn’t include provisions for:
- Cryptocurrency holdings
- Social media accounts
- Digital photo libraries
- Email accounts
- Online banking and investment accounts
- Music and media libraries
Without specific provisions for digital assets, your executor or trustee may be legally locked out of these accounts, even if they need access to manage your affairs.
Another critical update involves setting appropriate guidelines for inheritances. Many people create estate plans when their children are young, defaulting to simple distributions at age 18 or 21. As your children mature, your views on when they should inherit may change.
Mistake #4: Forgetting to Fund Your Trust
Getting a trust created is a huge accomplishment. You met with an attorney, signed the documents, and breathed a sigh of relief. Done!
Not quite.
A trust without assets is like a beautiful treasure chest with nothing inside. If you don’t transfer your assets into the trust (a process called “funding“), the trust can’t do its job.
If your goal is to avoid probate entirely, you’ll want to transfer into the trust’s name as much as possible. But, even if all assets aren’t in the trust, having the majority of assets there will improve liquidity and ease delays. Here’s what you should strongly consider putting in the name of the trust:
- Real estate (deeds)
- Bank and brokerage accounts
- Valuable personal property (cars, boats)
Transferring assets into the trust is an annoying administrative task, but not difficult.
Mistake #5: Never Updating Your Beneficiaries.
Not keeping your beneficiaries up to date can have disastrous results. Innumerable examples exist of ex-spouses inheriting IRAs with ensuing court battles due to out-of-date beneficiaries.
Understand what accounts always have beneficiaries:
- Retirement accounts (IRAs, 401ks, 403bs, SEP IRAs, Roth IRAs)
- Life insurance policies
- Annuities
- TOD or POD accounts
Beneficiary designations trump what’s in your will or trust, so getting this right is critical. Retirement accounts in particular carry their own distribution rules once they pass to an heir. See our related post on inherited IRA distribution rules for what beneficiaries need to know.
My additional guidance is to be sure that your beneficiary designations align with your overall estate plan. If you want to leave equal shares to all children, be sure your beneficiary designations reflect that. A mismatch between the two creates exactly the kind of misalignment you want to avoid.
Mistake #6: Not Planning for Young Adults
When your child turns 18 and heads off to college, there’s one document they absolutely need: an advance healthcare directive (also called a healthcare proxy or medical power of attorney).
Once your child is legally an adult, you no longer have automatic authority to make medical decisions for them or even access their medical information. If something happens, such as a car accident, a medical emergency, or yes, even a college party incident, doctors cannot legally share information with you or accept your input without proper documentation.
This isn’t about complex estate planning. An 18-year-old doesn’t need a sophisticated trust or detailed will. But they do need someone (usually their parents) designated to make healthcare decisions if they can’t. The National Institute on Aging has a helpful overview of how these directives work and why every adult, not just older adults, benefits from having one.
Getting this document in place is simple and inexpensive, yet most college students don’t have one. Parents who understand this risk should make it a priority before their child leaves for school.
The Bottom Line
Estate planning missteps aren’t just inconvenient. They can cost your family real time and money and create unnecessary stress during an already difficult time. The good news is that most of these mistakes are avoidable. Work with qualified professionals, review your plan regularly, and don’t put it off another year.
Your family will thank you for it.
HTG Advisors can help you coordinate your estate plan with your broader financial picture, working alongside your attorney to make sure your wishes are actually carried out.
Contact our team today to talk through where your plan may need attention.
¹ Trust & Will, 2026 Estate Planning Report (survey of 5,000 U.S. adults, Jan 28–Feb 5, 2026). https://trustandwill.com/learn/estate-planning-report-2026