10 Biggest Estate Planning Mistakes

Help your clients avoid these common pitfalls

Most people only grow old and die once, which means, generally, that they only need one estate plan -- and anything you do only once, you’re likely to do poorly. That’s why it’s important for wealth managers and financial advisors and estate planners to help their clients get it right the first (and only) time.

Here are 10 mistakes your clients can make when setting aside wealth for future heirs, as noted by our colleagues at Financial Planning.

1. Procrastinating 1. Procrastinating

While some of us would like to think we’re immortal, the time will eventually come when all of us will meet our maker. That’s why it’s important to push clients to have their own estate plan, before it’s too late, and state laws intervene by creating one for them.

2. The DIY Mentality 2. The DIY Mentality

While a “do-it-yourself” mentality may be admirable for some things, it is often wise for clients to seek a professional advisor when treading the murky waters of estate planning.

3. Failing to Think from All Angles 3. Failing to Think from All Angles

Sometimes clients get too invested in a particular planning approach, and forget to look at the big picture. While advisors should offer solutions to clients, they should also provide clients with “what-if” scenarios, so that they are fully prepared for what might go wrong.

4. Divorce 4. Divorce

Often clients do not take into the account that they might get divorced. As a contingency, clients can place restrictions on the money in the trust being distributed outside of the family. Or they could use a discretionary distribution standard that gives discretion to the trustees.

5. Missing the Fine Print 5. Missing the Fine Print

The fine print in estate planning documents can be the difference between retirement in the Bahamas or in a trailer home. To avoid being manipulated by the fine print, make sure the client and any professional advisors involved has dotted every "i" and crossed every "t."

6. Forgetting Pets 6. Forgetting Pets

Sometimes, clients forget to consider pets, and so when they die, their pets often have to follow them to their grave. Set up a pet trust to care for animals after the client dies.

7. Failing to Update All Documents 7. Failing to Update All Documents

Failure to update or title clients’ other documents may erase any benefits that estate planning documents offer. Make sure the client re-titles the assets in the name of the trust, not themselves, for clarity. And check regularly to ensure that beneficiary designations on all retirement documents are up to date. (They might not want that $1 million to go to their deadbeat ex-spouse anymore.)

8. Underestimating Trusts 8. Underestimating Trusts

Some clients assume that trusts are only for minor children. In actuality, trusts are asset-protection vehicles for the entire family, and can protect the assets from the claims of creditors.

9. Failing to Consider Digital Assets 9. Failing to Consider Digital Assets

When a client dies, their spouse or other heirs may not have access to the password for digital assets. As a result, there’s value that they can’t get to. To prevent this, make sure that clients have a list of all their online user names and passwords, and that the appropriate family member or trustee has access to the information.

10. No Passing on of Digital Libraries & Music Collections (Yet) 10. No Passing on of Digital Libraries & Music Collections (Yet)

As of this writing, clients cannot pass their digital libraries and music collections down to their heirs, due to terms of service of the major sellers of digital content. While this may change in the future, clients will just have to accept this fact for now.

The Worst Tax Clients in the World

Tax pros weigh in on who they most hate to see walk in the door

View the slideshow >>

Said No Client Ever ...

Things you never hear in accounting

View the slideshow >>

Accounting Movies Snubbed by the Oscars

Don’t expect to find these rarely seen accounting movies on Netflix or TCM. They never won more than a cult following, much less an Academy Award, perhaps because of an unfortunate resemblance to previous Oscar winners.

View the slideshow >>

Top 10 Year-End Tax-Planning Tips Your Clients Shouldn't Ignore

Grant Thornton LLP offers 10 tax tips for the end of calendar year 2015.

View the slideshow >>

Audit Risks to Look Out For

The CAQ highlights nine areas auditors will want to pay particular attention to in the next audit cycle

View the slideshow >>

7 Interview Tips to Win the Accounting Talent War

Finding qualified candidates is one of the main problems facing the accounting profession today, according to a recent survey by the AICPA. Tom Gimbel, founder and CEO of LaSalle Network, a staffing and recruiting firm based in Chicago, has seven tips to ensure firms identify the strongest candidates.

View the slideshow >>

The 2015 MP Elite

The fourth edition of our annual report highlights eight outstanding accounting firm leaders.

View the slideshow >>

Tax Extenders You Can Count On

Provisions that are likely to be passed – however late

View the slideshow >>

A Back-to-School Tax Break Refresher

A slideshow of education-related tax opportunities

View the slideshow >>

6 Strategies for a Stellar Site

Tips for improving your “online reception area”

View the slideshow >>