Estate Planning ยท April 10, 2023
The 5 Most Common Estate Planning Mistakes Florida Residents Make
Estate planning errors can undo years of careful saving and cause lasting harm to the people you love. These are the mistakes an experienced attorney sees most often, and how to avoid them.
Estate planning is one area where good intentions are not enough. A will drafted without legal guidance, outdated beneficiary designations, and failure to plan for incapacity are among the most common, and most costly, mistakes Florida families make. Here are the five we see most often in practice.
1. Having No Plan at All
The most common mistake is the most obvious: doing nothing. Nearly 60% of American adults have no will or estate plan. In Florida, dying without a will means the state's intestate succession laws govern distribution of your assets, and the result is often not what you would have chosen. Beyond the financial consequences, the absence of a healthcare directive and power of attorney can leave your family without the authority to make critical decisions during a medical crisis.
2. Outdated Beneficiary Designations
Life insurance policies, retirement accounts (IRAs, 401(k)s), and annuities pass by beneficiary designation, not through your will. If your ex-spouse is still listed as the beneficiary of your 401(k) because you never updated it after your divorce, they will inherit it. Courts have consistently held that valid beneficiary designations override the provisions of a will. Review your designations after every major life event.
3. Failing to Fund a Trust
Clients often create a revocable living trust, a useful tool for avoiding probate, but then fail to re-title their assets into the trust. An unfunded trust does nothing. The home that was supposed to pass through the trust and avoid probate still passes through probate because the deed was never changed to reflect the trust as owner. Funding the trust is as important as creating it.
4. Choosing the Wrong Personal Representative or Trustee
The person you name to administer your estate carries significant legal and financial responsibility. Choosing someone based on family politics rather than competence, organizational ability, and trustworthiness can lead to delays, conflicts, and even litigation. Consider naming a neutral professional, an attorney or bank trust department, as successor trustee in complex situations.
5. Not Planning for Incapacity
Estate planning is not only about death. A sudden illness, accident, or cognitive decline can leave you unable to manage your own affairs. Without a durable power of attorney and a healthcare surrogate designation, your family may have to petition a court for guardianship, an expensive, time-consuming, and emotionally painful process that could have been avoided with a few pages of documents prepared in advance.
If you recognize any of these mistakes in your own situation, it is not too late to correct them. Charles Vega and his team can review your existing plan, or help you create one from scratch. Call (800) 975-0529 today.
Attorney Advertising | General information only. Not legal advice. This is a static reading copy of a public Insights article. Consult an attorney about your specific circumstances.