We thought our readers might be interested in some of the common mistakes we see day in and day out in our financial planning practice. Here’s a quick review:

Mistake # 1: No Estate Planning at All

No one likes to think about dying, so perhaps that explains why so many people do nothing at all to plan for their passing. What they don’t realize is that if they die without a will, their state’s laws will likely determine how many of their assets are distributed.

But estate planning involves many more tasks than just writing a will. Establishing proper beneficiary designations, proper titling of accounts and planning for guardians for minor children, are examples of just a few. Most people at least make an effort to acquire life insurance, so why would they ignore making plans to ensure their estate is in proper order for their loved ones? In some cases, it’s probably just a matter of ignorance.

Mistake # 2 Not Following Through

More often than you can imagine, we see people who have made the effort to create an estate plan but fail to follow through on implementation. They spend $1,000 or $2,000 to hire an attorney, who creates wills, powers of attorney and in some cases trusts. They sign the papers, walk away and feel good that they’ve finally gotten their estate planning completed. They fail to change their beneficiary designations or fund their trusts (This involves re-titling accounts in the name of their trusts). In some cases they don’t even read the documents to check for obvious typos. Don’t pay thousands of dollars for an estate plan and skip the implementation.

Mistake # 3 Forgetting What You Learned

For many, estate planning is a learning process. You have to learn about wills, titling of assets, the probate process and beneficiary designations. The legalese is dry and boring. So what do they do? They don’t listen to their attorney and/or forget what they’ve learned. They continue creating new savings and checking accounts titled jointly with their children; they forget to add contingent beneficiaries on their retirement accounts. They add new accounts titled in their individual names. After a time you might not have guessed that they ever met with an estate planning attorney.

Mistake # 4 Failing to Update the Plan

Tax laws change; family members die; couples get divorced; grandchildren are born. In short, events happen that require that your plans be updated. Too often, people create their estate plans and then fail to periodically update them. Estate planning is an ongoing activity. You can’t just do it and then forget it. If you do it may all be for naught.

In summary, estate planning can be a fairly complex undertaking. There are many ways to make mistakes. What we’ve outlined above are but four of the most common ones that we see. With some awareness and a little effort we hope you can avoid these basic mistakes.