Your estate plan is a living document meant to evolve as your life changes. However, updating your estate plan is not always straightforward. Many people unintentionally make mistakes that can lead to confusion, disputes, or even legal challenges down the line. Whether you’ve recently experienced a major life event or simply haven’t reviewed your plan in years, it’s essential to avoid these common pitfalls. Here are five key mistakes to watch out for when updating your estate plan:
1. Forgetting to Update Beneficiary Designations
One of the most common errors is failing to align beneficiary designations on accounts like life insurance policies, retirement accounts, and payable-on-death (POD) bank accounts with your estate plan. These designations often override what’s written in your will or trust. If they are outdated—such as naming an ex-spouse or a deceased person—you could unintentionally leave assets to someone you no longer intend. Always review and update these designations alongside your estate plan.
2. Ignoring Major Life Events
Significant life changes such as marriage, divorce, the birth of a child, the death of a loved one, or a major financial shift should trigger an immediate review of your estate plan. Yet many people delay making updates, risking unintended consequences. For example, failing to include a new child or spouse may result in them being unintentionally excluded. Regularly revisiting your plan ensures it reflects your current wishes and circumstances.
3. Overlooking Digital Assets
In today’s digital age, it’s easy to forget about online accounts, cryptocurrency, and other digital assets. Without clear instructions on how to access and distribute these assets, your heirs may struggle to handle them. Be sure to inventory all digital assets and include access instructions and legal permissions in your updated estate plan.
4. Not Updating Power of Attorney and Healthcare Directives
Your financial power of attorney and healthcare directive (or living will) are crucial components of your estate plan. Many people neglect to update these documents, leaving someone who is no longer trusted—or no longer available—in charge of critical decisions. Periodically reviewing and updating these documents ensures that someone you trust will handle your financial and medical decisions if needed.
5. Failing to Consult with an Attorney
Lastly, a major mistake is attempting to update your estate plan without professional legal guidance. Estate laws frequently change, and what may seem like a small edit could have unintended legal or tax consequences. Working with an experienced estate planning attorney ensures your updates are properly executed and comply with current California law.
Conclusion
An estate plan is not a one-time task—it’s an ongoing commitment to securing your family’s future and ensuring your wishes are carried out. Failing to properly update your plan can lead to costly mistakes, unnecessary legal battles, or even unintended disinheritance. By keeping beneficiary designations current, accounting for life changes, including digital assets, updating powers of attorney, and working closely with a knowledgeable estate planning attorney, you can avoid these common pitfalls.
At Lowthorp, Richards, McMillan, Miller & Templeman, we understand that life is ever-changing, and your estate plan should reflect that. Whether you’re reviewing an existing plan or starting fresh, our experienced attorneys are here to guide you every step of the way. Don’t leave your legacy vulnerable to oversight—take proactive steps to protect it today.
Please don’t hesitate to reach out for legal assistance. Contact us at (805) 981-8555 or fill out our online contact form. We proudly serve Ventura, Santa Barbara, and San Luis Obispo counties.