4 Expert Insights on Avoiding Estate Planning Pitfalls for 2025
Written by
Laura Beck
Edited by
Rebekah Evans
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No one really enjoys thinking about estate planning. It’s intimidating and can feel overwhelming. Add in all the emotions of thinking about what happens after you’re gone and it’s no wonder many people keep pushing it to the bottom of their to-do list. But if estate planning isn’t done right, families can end up fighting, money doesn’t go to loved ones and assets end up with the wrong people.
Here are four critical mistakes to watch out for in 2025 when planning your own estate.
Not Having a Comprehensive Estate Plan
You might think that, once you’ve got a will or a trust, you’ll have everything you need. But if that’s all you have, your assets and your loved ones’ needs won’t be fully protected.
“An estate plan is more than just a last will and testament,” explained Erin Smith, director of estate planning at Edelman Financial Engines. “It is vitally important that the estate plan also include incapacitation planning. If a person becomes incapacitated and does not have a durable power of attorney, there is no one (including spouses or adult children) with the ability to make non-healthcare decisions on their behalf.”
Smith went on to explain that, at a minimum, every estate plan should consist of: a durable power of attorney, healthcare power of attorney — with a HIPAA release authorization, a last will and testament and beneficiary designations.
If these things get overlooked, you’re risking leaving your loved ones with extra challenges during what’s already a tough time. But if you develop a complete estate plan, you can have the peace of mind that your wishes will be honored and your family will have what they need.
Not Keeping Your Beneficiaries Up to Date
Designating your beneficiaries means that you’re spelling out how your assets will get distributed when you die. This means deciding who gets what from your life insurance policies, your retirement accounts, your bank accounts and so on.
“Beneficiary designations have the potential to derail an estate plan,” Smith said. “A properly-executed beneficiary designation supersedes the terms of a last will and testament and a revocable living trust. It is vitally important that the beneficiary designations coordinate with the overall estate plan.”
If you’ve listed beneficiaries that don’t match your current life situation, it could get messy. Your assets might go to your ex-spouse instead of your current spouse, for example. Always keep your beneficiaries up to date.
“An estate plan is not complete until beneficiary designations on retirement accounts and life insurance have also been reviewed and updated, as necessary,” Smith added.
Not Choosing Your Executor Carefully
When you select an executor (for a will) or a successor trustee (for a revocable living trust), you shouldn’t take it lightly. This person is going to have a big responsibility — managing your affairs, distributing your assets and following all the instructions in your estate plan.
“Like many things related to finances and family, choosing an executor can be an emotional decision,” Smith said. “Many people fall into the trap of nominating the first child, the favorite child or the best friend without considering whether this person is a good fit.”
Smith went on to explain that the best choice is someone who is available, willing, organized and has the right temperament.
“Settling an estate (or a revocable living trust) can take the better part of a year, even in the best of circumstances,” Smith added. “If the choice of executor is someone with a high-pressure job, young family or other full-time commitment, they may not have the bandwidth to take on the job.”
Smith also said that it’s a good idea to ask the person whether they’re comfortable with the responsibilities and if they’re willing to take on the job.
“People often make the mistake of thinking back to the settlement of their parents’ estates, in simpler times and thinking that the settlement of their own estate will be just as easy,” Smith said. “However, the settlement of an estate today is often more complex than it first appears. An executor needs to be able to identify, gather, organize and manage personal documents, financial accounts, passwords, tax returns and other manners of information, both digital and physical.”
Putting the wrong person in charge could mean the whole process takes a lot longer or it might not be done correctly. It could even mean fights between the beneficiaries.
“Death does not always bring out the best in people,” Smith added. You want to choose someone who is honest, objective and will keep a cool head when things get emotional.
Not Introducing Your Financial Planner to Your Family
You also want to make sure that your family knows who your financial planner is. This goes for your executor, but also your spouse and children. These people are going to need to know all the details of your finances and being able to get this information from your financial planner will make everything much easier for everyone involved.
“At a minimum, the financial planner’s identity should be known to the family and other decision makers and the planner’s contact information included with the other important papers,” Smith explained.
This will help make sure there’s a smooth transition of your financial assets, that all of your wishes will be carried out and prevent any misunderstandings.
“While the financial planner may not be the first person contacted following a death or serious accident, he or she is likely within the first five and it can be helpful if introductions are made while everyone is healthy,” Smith said. “This can be especially helpful if the spouse has historically not been involved with financial matters or if parents would like to begin to delegate financial matters to a child.”
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