Dealing with death in the family can be hard enough as it is, but an improper estate plan can cause unneeded headaches and strife. From expired plans to titling mistakes, at Quotient Wealth Partners, we work with families to support their estate planning goals, by helping to safeguard your wealth and integrate your estate and financial plans.

Mistake 1. Not Thinking You Need an Estate Plan

Improper or absent estate plans can result in poorly distributed plans which do not align with your wishes on the money you worked so hard to earn. Unfortunately, we’ve seen examples of this played out in public, particularly of famous individuals who passed away without an estate plan in place. Consequently, lacking an estate plan can lead to costly family feuds and legal battles, draining resources and causing additional duress for ultimately everyone involved.

Mistake 2. Outdated Estate Plans

Life circumstances change, and laws can just as often. Different states have varying estate laws which can cause issues with distributions and last wishes, and even federal laws are in constant lurch between administrations. For example, the “One Big Beautiful Bill” extended the 2017 Tax Cut and Jobs Act, eliminating the estate plan exemption. Keeping an up-to-date estate plan can help keep assets going where you want, as well as stay within both state and federal regulations. Your financial advisor will discuss with you and determine how often you should meet to review your estate plan.

Mistake 3. Improper Asset Titling

An estate plan can be fully furnished and still fail with improper asset titling. Regardless of instructions in your will, jointly titled assets may pass directly to co-owners. This can occur within accounts such as Payable on Death (POD) or Joint Tenants With Right of Survivorship (JTWROS) accounts. Additionally, assets not titled under your trust may unnecessarily go through probate. Make sure this doesn’t happen to you; work with your advisor and estate planning attorney to title your assets properly.

Mistake 4. Beneficiary Conflicts and Mistakes

Naming your beneficiaries should be more than a going through a list. Minors named without a trust or guardian may require court-appointed conservators, and family disputes can lead to division and legal actions between heirs.

Beneficiary appointments are often regarded as the most qualitative, and important part of an estate plan. And having an advisor trained in estate planning can bring years of experience to the table. Make sure to consider your beneficiaries carefully and also update your beneficiary designations as needed, whenever you review your estate plan.

Mistake 5. Overreliance on Joint Accounts and POD

Joint accounts and payable-on-death designations are powerful tools in estate planning, but they must be leveraged properly. POD and joint accounts enable you to automatically transfer money to your designated beneficiary or beneficiaries after you die.

However, these accounts do not allow for conditions or obligations, which means that the named beneficiary is under no legal requirement to carry out your wishes. These tools also do not allow for contingency planning, meaning that certain conditions can freeze or hinder the transfer process. Additionally, these accounts pass outside of probate, meaning that they do not rely not a will to move the asset.

Mistake 6. Forgetting About Taxes

Estate taxes can be a huge consideration in your estate plan and vary immensely state-to-state. The executor of the estate is responsible for paying debts of the estate, including estate tax, before distributing assets to the beneficiaries. Ensuring there is enough cash to pay these expenses is important, because lack of liquidity will force the executor to sell assets.

Transfer vehicles, like trusts, can also affect taxes. For example, assets in irrevocable trusts (which exist outside of your estate), do not receive a step-up in cost basis. So for those assets, your beneficiaries will not be able benefit from a step-up—which is a tax provision that reduces capitals gain tax.

Invest in Your Legacy

Estate planning may seem like a daunting process or something that you can put off. Don’t let that happen to you! At Quotient Wealth Partners, our team of experienced advisors can help set your mind at ease about your estate plan and keep it up to date, so you can get back to what’s important: spending time doing what you love with your loved ones.

If you’d like help with navigating estate planning, please contact us here or call us at (888) 895-4797