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Creating Your Estate Plan



While creating your Estate Plan is important, creating one that avoids common pitfalls and mistakes is essential! After all, you don’t want to go through all the time it takes to create a plan to protect your loved ones, just to have it riddled with errors that end up causing them stress and headaches in the end.
Making sure you’re aware of common Estate Planning mistakes means you’ll be more likely to avoid them. So, whether you’re creating your first plan ever, or you’re updating an existing one, get familiar with what can trip you up, so you can write a plan that accomplishes what you envision while you safeguard your legacy.

The 12 Most Common Estate Planning Mistakes

Since it can be easy to overlook certain things when writing an Estate Plan, we put together this guide for you. It sheds light on the most common Estate Planning mistakes out there, which include:

1. Failing to plan
2. Not discussing with family and friends
3. Naming just one Beneficiary
4. Forgetting about Power of Attorney for Health & Property s
5. Forgetting about final arrangements
6. Forgetting about your digital assets
7. Forgetting about charities that are important to you
8. Not thinking about your children’s futures
9. Getting too specific
10. Forgetting about taxes
11. Not securing your Estate Plan
12. Updating your plan too infrequently


1. Failing to Plan
The biggest mistake you can possibly make when it comes to your Estate Plan is simply not making the time to do it. Unfortunately, it’s something too many of us put off – but failing to prioritize your Estate Plan, or not ensuring it’s complete, ultimately means you’re risking the financial future of your Estate, your legacy and most importantly, your loved ones.

2. Not Discussing with Family and Friends
Of course, there are exceptions to this rule, but, if possible, it’s usually a good idea to have even a brief conversation with your friends and family. Setting expectations now, where there is an opportunity for discussion if needed, could lessen the likelihood that there is any contention or disagreement after your passing. If this isn’t an option, there’s language you can write into parts of your Estate Plan that specify anyone who contests anything could be written out.

3. Naming Just One Beneficiary
You should always have more than one beneficiary designated for any of your assets. In the event that a beneficiary passes away before you do, you’ll want to have what’s known as a contingent beneficiary. This is who would be next in line to your Estate or any given asset. Ideally, you should have more than one contingent beneficiary listed.

4. Forgetting about Power of Attorney for Health and Property
Naming a Power of Attorney (either medical or financial) is important, as these are the people who would step in to make decisions should you become incapacitated. Note that in most cases, these roles dissolve upon your passing. They can also be different from the people you identify in your Will as Executors and Trustees.

5. Forgetting About Final Arrangements
Your loved ones will be grieving after you pass away but planning in advance what you’d like to have happen (in terms of your funeral or burial arrangements) can be a blessing for those you leave behind. Another important component to this is making sure your wishes for end-of-life care are known (i.e., hospice, assisted living, etc.).

6. Forgetting About Your Digital Assets
The idea of Digital Estate Planning is relatively new, but it makes sense, given the technological world we live in. Be sure to include a Digital Estate Plan that lays out how you’d like all your digital assets to be handled after you pass away. This could be anything from social media accounts to online banking, to email accounts and more. We recommend the SmartwillsAccess Resource to help organize all this information.

7. Forgetting About Charities that are Important to You
Particularly if you have a large Estate, but even if you don’t have incredible wealth, you can still allocate some of your assets to benefit a charity that’s important to you. Earlier in this newsletter we discuss the reasons for considering a charitable donation as part of Estate Planning.

8. Not Thinking About Your Children’s Futures
While your directions may be well-intentioned, there are cases where how you word things could come back to haunt your children or heirs. If your children are very young, you may want to include directions for how their guardian should spend assets, either to take care of them or to benefit them in other ways.
Other missteps could include assuming your children will want something, when in fact they may not. For example, you might intend on passing down a vacation home that’s been in your family for generations, with the stipulation that it could only be sold if every child is married with their own vacation home. But what happens if one of the children doesn’t want to get married? Or doesn’t want to be a homeowner? In these cases, substantial legal fees and devaluation of an asset could affect the overall size of your estate as heirs go through the courts to gain allowances.

9. Getting Too Specific
We normally advise you to be as specific as possible when writing your Estate Plan. However, there is one caveat to that. You may own assets at one point in life that you might not necessarily have in the future. Are you putting stocks in your plan? Real estate? Season tickets to your favourite sports team? Are these all things you’re guaranteed to have decades from now? One way to avoid complications from being too specific actually just stems from Estate Plan management best practices. Review (and update if needed) your Estate Plan every three to five years, or anytime you have a major life event. If you sell a house that was in an original Estate Plan document, be sure to revise it as soon as possible.

10. Forgetting about Taxes
Estate tax liability can put a huge dent in what you plan on leaving your beneficiaries. In addition to your Estate, owing taxes before beneficiaries are paid out, you also want to think about how your gifts will impact individual heirs, too.

11 Not Securing Your Estate Plan
Having the best Estate Plan in the world won’t accomplish anything if your heirs can’t find it. Think twice before putting your plan into a safety deposit box – it can become complicated when your loved ones try to gain access after you pass away. But you do want to keep all of your Estate Planning documents together and in a safe place. Once again, we recommend the SmartwillsAccess Resource as a great place to keep copies of key documents with the original signed materials being kept in a fire retarded vault.

12. Updating Your Plan Too Infrequently
Unfortunately, Estate Planning is not a set-it-and-forget-it deal. You need to keep it current and make sure it reflects all of your life changes as they come. As we mentioned earlier, any major life event could be cause for an update – this could include marriage, divorce, the birth of a child or death of a family member or beneficiary.


Download our Estate Planning Guide here

Want more information?

Are you interested in a consultation with Peter R. Welsh?
Contact me at Peter@SmartWills.ca
By telephone 416-526-3121
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This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.