Some estate planning mistakes should be avoided, but they aren't!
Some basic mistakes should never be made in the first place. However, unfortunately they happen over and over again. While a comprehensive list of these mistakes probably is not possible, a list of surprising errors were created, according to the Wills, Trusts & Estates Prof Blog in "10 Surprising (or Surprisingly Common) Estate Planning Mistakes."
A few of the common errors are:
- People do not name contingent beneficiaries on life insurance policies or retirement accounts. If the beneficiary predeceases the account holder, the money reverts to the estate and requires probate.
- People like to sell property to a family member for $1 or some other far below the market value amount. This can cause problems with the IRS for the family member, if the sale happens shortly before the seller passes away.
- Some people name specific investments in their wills. If they no longer hold that asset when they pass away, and if it should happen to be worth a lot of money, then that can force the estate to purchase that investment.
- Giving gifts without regards for how they might have an impact on the lives of the recipient.
- Leaving money for minors, without creating a guardianship for it.
Reference: Wills, Trusts & Estates Prof Blog (June 5, 2018) "10 Surprising (or Surprisingly Common) Estate Planning Mistakes."