Experts urge early estate planning to avoid costly mistakes

Estate planning is often delayed until it’s too late, but legal and financial experts say early preparation can prevent costly mistakes, protect assets, and reduce family conflict.

“Everyone thinks they have more time,” said Nicole Hewitt, an estate planning attorney at HWK Law Group. “You don’t know what you don’t know, so we have to plan for these ‘what ifs.’ ”

Despite the importance of estate planning, many families delay it, viewing it as complex or something only for the wealthy.

“We hear from a lot of families who’ve had this on their list for years, but careers and growing families take priority,” said Lauren Debelius, MBA, principal at Diverse Financial Partners LLC.

Estate planning goes far beyond drafting and signing documents. With the right advisor, it is more about learning about the family’s goals and helping to facilitate conversations amongst family members to demystify the process. Many people believe the process is more tedious and overwhelming than it really is.

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According to Hewitt, every estate plan should include three core documents: a financial power of attorney, which authorizes someone to make financial decisions on your behalf if you become incapacitated; an advanced medical directive, which outlines your preferences for medical care if you are unable to communicate them; and a last will and testament, which directs how your assets will be distributed after death and names of guardians for minor children.

“These are your living, breathing documents,” said Hewitt. “They live with you and protect you while you’re alive, but they also protect you when you die.”

One of the most common mistakes Hewitt sees is the use of online do-it-yourself templates for key documents like powers of attorney or wills. Many online legal forms have contradictory language, making them legally powerless. Debelius said the rise of social media influencers has led to people trying to manage their retirement and estate planning on their own.

“While you can do that, small nuances are often missed. You wouldn’t visit your mechanic for a haircut just because they posted a video of a successful trim, so why would you trust an online stranger or artificial intelligence with your whole plan? Meeting with a professional gives you a holistic view of your entire financial picture and addresses multiple areas to help your larger picture,” Debelius said.

Another error is failing to track “orphan” retirement accounts left behind at previous jobs. A professional will help take the time required to look through statements, consolidate them, and help families understand how they save for their golden years.

Debelius also flagged overspending as a problem for high-income earners. “When people start making more money, they often lose sight of their discretionary spending, which can derail financial goals,” she said. She recommends clients track their monthly expenses to get a clear picture of what’s left for long-term savings.

For those with dependents or significant assets, establishing a trust can streamline the transfer of wealth and avoid probate.

“People assume they don’t need a trust, but if you have dependents or any assets, you might benefit from one,” said Debelius. Trusts can protect assets from creditors, avoid probate, and maintain privacy for beneficiaries.

Changes in tax laws and retirement rules have made it critical for families to review their estate plans regularly.

The Trump administration’s increase in the federal estate tax exemption to $13.6 million will sunset in 2026, dropping it to $5 million.

Rules for inherited IRAs have also shifted. Beneficiaries now have just 10 years to liquidate inherited IRA funds, compared to the previous option to “stretch” withdrawals over their lifetimes.

“The choice of who to select for your beneficiaries may change if you know that your $500,000 retirement account will have a $50,000 annual impact for your heirs if they take it out systematically during the allowed time period,” said Debelius.

Estate planning is not just for families. For business owners, estate planning is essential to ensure a smooth leadership transition and to protect personal and business assets.

“Make sure your accountant understands that you have personal financial goals in addition to your business’s goals,” said Debelius. She encourages business owners to create a plan that aligns with their personal and business priorities, ensuring their loved ones are cared for.

Estate planning, when done right, can also alleviate family disputes. One way to avoid conflict among heirs is to ensure family members understand the plan.

“The number one thing you can do is tell your family what you’re doing,” said Hewitt. “There’s nothing worse than doing all this planning and having it be a surprise for your family.”

Both experts recommend sharing copies of key documents with family members or trusted fiduciaries to avoid confusion. “There’s nothing that drags on a process more than hunting for wills and documents after someone has passed,” said Debelius.

Estate planning doesn’t have to be complicated, but it requires action. Experienced legal and financial professionals can make the process easier, help families avoid costly mistakes, and protect loved ones.

“The biggest compliment is that clients say it was easier than they thought. Estate planning mistakes can have a generational impact, and we work with families to ensure it’s positive,” said Hewitt.