Common Estate Planning Mistakes and How to Avoid Them

Estate planning isn’t just for the ultra-wealthy; it’s for anyone who wants to protect their loved ones and ensure their assets are distributed according to their wishes. Without an estate plan, Michigan law decides who inherits your property, which likely won’t align with your intentions. A well-structured plan can prevent legal headaches, heated family disputes, and unnecessary expenses.

What Happens If You Don’t Plan for the Unexpected?

One of the most common mistakes is failing to plan for unexpected situations like incapacity.
A durable power of attorney allows someone you trust to handle financial matters if you become unable to do so. A medical power of attorney ensures your healthcare decisions are made according to your wishes. Without these important documents, your loved ones may face court battles just to manage your affairs.

The Dangers of DIY Estate Planning

While online templates and do-it-yourself wills seem like a cost-effective solution, they often lead to major problems. Estate laws vary by state, and a generic document may not comply with Michigan’s legal requirements. Poorly drafted documents can be confusing, leading to disputes and even court challenges. Working with an experienced estate planning attorney ensures your documents are valid, clear, and legally enforceable.

Why Updating Your Estate Plan is Essential

Life is constantly changing, and your estate plan should reflect those changes. Major events like marriage, adoption, divorce, the birth of a child, or the death of a beneficiary should prompt an immediate review. Outdated plans can create confusion and unintended consequences, leaving your loved ones with unnecessary complications. Regularly updating your estate plan keeps it aligned with your current wishes.

Naming Beneficiaries and Contingency Plans

Many people assume their will dictates all asset distributions, but accounts like life insurance policies, retirement funds, and bank accounts require named beneficiaries. One common mistake is failing to update these designations, which can result in assets going to an ex-spouse or unintended individuals. Additionally, failing to name contingent beneficiaries can lead to assets being distributed under state intestacy laws if your primary beneficiary predeceases you.

Planning for Your Children’s Future

If you have minor children, estate planning is critical to ensure their well-being. Naming a guardian in your will specifies who will care for them if something happens to you. Without this designation, the court will decide, and the chosen guardian may not align with your wishes. Additionally, creating a trust can protect your children’s inheritance by ensuring assets are managed responsibly until they reach adulthood.

The Importance of Funding Your Trust

A living trust can be a powerful estate planning tool, helping your heirs avoid probate and ensuring a smooth transfer of assets. However, a trust is only effective if it’s properly funded. Many people create trusts but forget to transfer their assets into them, rendering them useless. Ensuring all assets are titled in the trust’s name is a crucial step in making your estate plan work as intended.

Estate Planning for Blended Families

Blended families often have unique estate planning needs. Without clear instructions, disputes can arise between biological children, stepchildren, and surviving spouses. A well-drafted estate plan outlines exactly how assets should be distributed, reducing the risk of family conflicts. Consulting with an estate planning attorney can help ensure all family members are considered fairly.

Secure Your Legacy with the Right Estate Plan

Avoiding these common estate planning mistakes can save your loved ones from unnecessary stress and legal complications. Whether you need to create a new estate plan or update an existing one, Suzanne R. Fanning, PLLC is here to help with over 20 years of experience advocating for clients. Contact our Ann Arbor office today to schedule a consultation and take the next step in protecting your future.