Eunicia Peret · Excelstra
Legacy Planning Mistakes & Ways to Avoid Them
Creating a flawless legacy plan is more than a task—it's an art.
Imagine dedicating your valuable time to crafting a plan designed to protect your loved ones, only to include mistakes that could cause future stress and turmoil.
The goal is to create a seamless path, not a complex puzzle.
Whether you're drafting your first plan or revising an existing one, now is the perfect time to master the nuances that could lead to pitfalls. This knowledge will empower you to build a comprehensive plan that reflects your vision and protects your legacy.
Scroll down to identify common legacy planning oversights and learn how to prevent them today.
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13 Common Missteps That Could Impact Your Legacy
1. Failing to Plan
One of the biggest mistakes is simply not making the time to create your Legacy Plan. Procrastination can risk the financial future of your estate, legacy, and most importantly, your loved ones.
The Fix: If you haven't started your Legacy Plan, if it's been over 5 years since your last update, or if you've recently had a major life event, now is the time to get started or review your plan.
2. Not Discussing with Family and Friends
While there are exceptions, discussing your plan with friends and family can prevent future disagreements. If this isn't possible, you can include language in your Legacy Plan specifying that anyone contesting it could be excluded.
The Fix: Work with a qualified Estate Planning attorney to discuss your plan with key individuals and notify those named in your Will or Trust.
3. Naming Just One Beneficiary
Having only one beneficiary for your assets can be risky. In case they pass away before you, having a contingent beneficiary is crucial.
The Fix: List a primary and one or more contingent beneficiaries for each asset, account, or policy.
4. Forgetting about Power of Attorney or Healthcare Representatives
Naming a Power of Attorney and/or Healthcare Proxy is essential for making decisions should you become incapacitated.
The Fix: If your Living Will doesn’t designate a Power of Attorney or a Healthcare Proxy, consider speaking with a qualified Estate Planning Attorney about implementing standalone documents that appoint a trusted person or people to make important financial and medical decisions for you.
5. Forgetting about Final Arrangements
Planning your funeral or burial arrangements in advance can be a blessing for your loved ones during their time of grief.
The Fix: Write down your wishes for end-of-life care and final arrangements, and include these in your Legacy Plan.
6. Forgetting about Your Digital Assets
Digital legacy planning is crucial in today's technological world. Include how you'd like your digital assets managed after your passing.
The Fix: Create a Digital Legacy Plan and name a Digital Executor to handle these assets properly.
7. Forgetting about Charities that are Important to You
Allocating part of your estate to charities can be a meaningful part of your Legacy Plan.
The Fix: Include gifts to charities in your plan or name them as beneficiaries of specific assets.
8. Not Thinking about Your Children’s Futures
Well-intentioned directions can sometimes backfire. Ensure your plan benefits your children without causing unintended consequences.
If your children are very young, consider including directions for how their guardian should spend assets, either to take care of them, or to benefit them in other ways.
The Fix: Provide clear guidance on how inheritances should be passed to minors and work with an attorney to carefully word any stipulations (marital status, gradution, etc.).
9. Getting Too Specific
While specificity is generally good, avoid including assets that you might not have in the future.
The Fix: Regularly review and update your Legacy Plan every 3 to 5 years or after major life events.
10. Improperly Funding Your Trust
Creating a trust is only half the battle—ensuring it's funded is the other half.
The Fix: Work with an Estate Planning attorney to properly fund your trust, title your assets, and handle your property.
11. 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.
The Fix: Most often, estate tax liability isn’t going to be a huge problem. Unless you have a very large estate ($11.58M per person or $22.36M per couple, for example), your estate will not be taxed at the federal level. Keep in mind though, in not too many years, unless an extension is put in place, the law will revert back to the former $5 million exemption limit. Additionally, you should consider working with a qualified Estate Planning attorney and tax professional to figure out if the state you and your beneficiaries live in has a state estate tax and what the limits are, prior to writing it into a Will or Trust.1
12. Not Securing Your Legacy Plan
Your Legacy Plan is useless if your heirs can't find it. But you do want to keep all of your legacy planning documents together and in a safe place.
The Fix: Store your plan in a fireproof safe and inform a trusted family member of its location and access details.
13. Updating Your Plan Too Infrequently
Legacy planning is not a set-it-and-forget-it deal. Keep it current to reflect life changes.
The Fix: Update your plan after any major life event and review it every 3 to 5 years.
FINANCIAL LESSON:
Your Wishes can Flourish from a Flawless Plan
Crafting a Legacy Plan is a profound act of generosity toward your family and loved ones—a testament to your care and foresight. But even the best intentions can go awry if you fall into common legacy planning traps.
Ready to draft your first Legacy Plan or review your current arrangements?
Don't wait—secure your legacy and ensure your wishes are honored.
Schedule a meeting with me today to get started.
Warmly,
Eunicia Peret
Excelstra
Eunicia Peret
Excelstra
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Eunicia Peret
Excelstra
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Content prepared by Snappy Kraken.
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This guide is provided for informational purposes only; it is not designed as advice for an individual’s personal situation. The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. Our firm does not provide, and no statement contained in the guide shall constitute, tax or legal advice. All individuals are encouraged to seek the guidance of a qualified professional regarding their personal situation.
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Eunicia Peret
Excelstra
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