Key Estate Planning Mistakes and How to Avoid Them

Key Estate Planning Mistakes and How to Avoid Them. Close-up of estate planning documents on a desk with a pen and glasses, highlighting the importance of preparing legal plans for the future.

Estate planning is crucial for making sure your assets and loved ones are cared for according to your wishes. However, many individuals make errors that can lead to unnecessary stress, financial loss, or even family disputes. Niswanger Law in West Monroe, LA is dedicated to helping clients navigate these common estate planning mistakes.

In this post, we’ll highlight the key pitfalls to avoid and provide valuable estate planning tips to guide you through the process.

 

1. Failing to Create an Estate Plan

One of the most frequent mistakes is not having an estate plan at all. Many assume it’s unnecessary, especially if they don’t have significant wealth, but that assumption can lead to unintended consequences.

Without an estate plan:

  • The state decides how your assets are distributed.
  • You lose control over who manages your affairs if incapacitated.
  • Your loved ones may face legal fees and delays in probate.

What you can do:
Even a basic estate plan, including a will, power of attorney, and healthcare directive, helps. Niswanger Law can tailor a plan to fit your needs, no matter the size of your estate.

 

2. Not Updating Your Estate Plan Regularly

Life changes, and so should your estate plan. Major events like marriage, divorce, or the birth of a child can significantly alter how your assets are distributed.

When to update your estate plan:

  • Marriage or divorce
  • Birth of children or grandchildren
  • Significant financial changes
  • Changes in tax laws
  • Death of a beneficiary or executor

Pro tip: Review your estate plan every 3 to 5 years or after any major life event. Our Law Estate Services offers reviews to keep your plan current.

 

3. Ignoring Beneficiary Designations

Beneficiary designations on life insurance policies, retirement accounts, and other assets override the terms of your will. This means if your designations are outdated, your assets may go to the wrong person.

Common mistakes:

  • Forgetting to update after a divorce or remarriage.
  • Naming minor children without setting up a trust.
  • Failing to name contingent (backup) beneficiaries.

Estate Planning Tip: Keep all beneficiary designations aligned with your overall estate plan. Niswanger Law ensures your documents reflect your current wishes.

 

4. Overlooking Tax Planning

Estate taxes can take a significant portion of your estate, leaving less for your heirs. Many people fail to plan for tax liabilities, which can reduce the value of their estate.

Estate tax considerations:

  • Federal estate tax applies to estates above a certain threshold.
  • Some states have their own estate or inheritance taxes.

Solution:
Work with an experienced attorney to develop tax-saving strategies like trusts or gifting. Niswanger Law specializes in estate and tax planning, helping reduce your tax burden.

 

5. Forgetting to Plan for Incapacity

Estate planning isn’t just about what happens after you pass—it’s also about preparing for potential incapacity. Many overlook the need for durable powers of attorney or healthcare directives.

Key documents to include:

  • Durable Power of Attorney: Manages your financial affairs.
  • Advance Healthcare Directive: Outlines your medical wishes if you’re unable to communicate.

Without these, loved ones may have to go to court to gain control over your affairs, leading to unnecessary costs and delays.

 

6. Selecting the Wrong Executor or Trustee

Choosing the wrong executor or trustee can create complications. This person will handle the distribution of your estate, so it’s crucial to choose wisely.

Consider this when selecting an executor:

  • Are they trustworthy and responsible?
  • Do they have the time and ability to manage your estate?
  • Are they comfortable handling legal and financial matters?

Estate Planning Tip: It’s OK to choose a professional trustee or executor, especially if your estate is complex. Niswanger Law can help you explore your options.

 

7. Neglecting Long-Term Care Planning

Long-term care is a significant financial burden for many families. Without planning, the cost of care could deplete your estate.

Options for long-term care planning:

  • Long-term care insurance: Helps cover the cost of care without draining your estate.
  • Medicaid planning: Strategies to help you qualify for Medicaid without losing all your assets.

 

How Niswanger Law Can Help You Avoid Estate Planning Mistakes

Niswanger Law provides customized estate planning services tailored to your unique needs. With our expertise in estate, tax, and business planning, we help you avoid common mistakes and ensure your wishes are carried out smoothly.

Why Choose Us?

  • Personalized Service: We design plans that reflect your specific goals.
  • Experienced Team: Our attorneys bring extensive experience in estate law, ensuring every detail is handled with care.
  • Ongoing Support: We help you review and update your plan as life changes.

Ready to start? Schedule an appointment online today or call Niswanger Law at (318) 953-0071. We are located at 3820 Cypress Street, West Monroe, LA.