Watch out for These Estate Planning Pitfalls
Estate planning can make or break how smoothly your legacy is passed on—and mistakes are more common (and costly) than you might think. In our latest episode of "Wealth Is a Choice Podcast," we broke down real-life mishaps, legal risks, and simple errors that can leave families feuding, and assets tied up.
The Big Picture
In the podcast episode Estate Attorney Joe Garavaglia discusses how plans always aim to make things easier, not harder—yet vague communication, outdated documents, and missing details often upend even the best intentions. We have outlined the common pitfalls he discussed and solutions below.
Why it Matters
Sibling disputes blow up fast when transparency is lacking which leads to large legal expense.
Trustees can be placed under scrutiny: Without written records, they are wide open to accusations (or lawsuits).
Overly complex (or restrictive) trusts can handcuff beneficiaries—sometimes for life.
Poor deed work can create BIG tax bills for heirs or spark family drama.
Key Pitfalls
No Paper Trail
Fuzzy communication = future lawsuits. If you're a trustee or have a named trustee, make sure all emails, receipts, texts, and meeting notes are saved.
Family Dynamics
Sibling rifts can grow after parents pass away—especially if one person’s doing all the work, or instructions are vague.
Bad Trustee Choices
Naming the wrong trustee (or not informing the right one) may lead to embezzlement or assets mishandled for years - more on this in the podcast.
Overpaying for Irrelevant Complexity
Costly “one-size-fits-all” plans like an Asset Preservation Trust (the infamous $10,000 trust) often solve problems you don’t have—while locking up assets unnecessarily.
Poorly Crafted Deeds
Adding kids to the house deed? Watch out, you could accidentally trigger huge tax ramifications.
Neglecting Step-up in Basis Rules
A misstep here can mean thousands lost to taxes for your heirs. This one often pairs with adding adult children to the house deed.
Blended Family Oversights
Without careful structuring, step kids or children from a prior marriage may get accidentally cut out of your estate.
What to do:
Communicate: Tell would-be trustees and heirs what you’ve planned, and keep their contacts updated.
Document everything: Track money, decisions, and communications.
Review plans after major life events—kids, marriages, divorces, and deaths all trigger updates.
Consult the right pros: Surprising fact—sometimes simpler is better, and you may not need a trust at all.
Bottom Line:
Don’t let well-intended, but poorly structured estate plans ruin relationships or waste wealth. Invest the time to get it right and revisit your plan as life evolves.
🎧 Get the full scoop (and more cautionary tales) in our podcast: Wealth Is a Choice – Ep. 1: Joe Garavaglia Estate Misses & Fixes
If we can help in addressing any of the points above or you have questions about your estate plan please reach out. If you know someone who might benefit from estate planning or have questions, feel free to share this email and our podcast!