A few years ago, a new client came to see me. Her father, a successful Manhattan business owner, had just passed away. He had a will, meticulously drafted and signed. The problem wasn’t the will—it was a life insurance policy he’d bought thirty years earlier. The named beneficiary was his first wife, a woman he had divorced in 1998. That single, forgotten form overrode every intention in his will, directing a seven-figure payout away from his children and into the hands of an ex-spouse.
In my practice, the most devastating estate planning mistakes are rarely complex. They are almost always simple oversights—the result of a “set it and forget it” mentality. A proper plan is not a static document you sign and file away. It is a living framework for your family’s future, and it requires deliberate stewardship.
Mistake 1: Outdated Beneficiary Designations
The story of the forgotten life insurance policy is far from unique. Many significant assets pass outside of a will. These are called non-probate assets, and they are governed by contract law, not by the terms of your will. They include:
- Life insurance policies
- Retirement accounts (401(k)s, IRAs, 403(b)s)
- Annuities
- Payable-on-death (POD) or transfer-on-death (TOD) bank and brokerage accounts
When you open these accounts, you fill out a beneficiary designation form. That form is a legally binding contract. Whatever it says, goes—regardless of what your will directs. Divorce, remarriage, the birth of a child, or the death of a named beneficiary are all life events that demand an immediate review of these forms. Failing to update them is one of the most common ways a person’s true intentions are frustrated.
We advise our clients to conduct a beneficiary audit every three to five years. It’s a straightforward process of confirming that your designated heirs on every single account align with the legacy you intend to leave. It is the simplest contingency planning there is.
Mistake 2: Choosing the Wrong Fiduciaries
When you create a will, you name an Executor. When you create a trust, you name a Trustee. These individuals or institutions are your fiduciaries. Their role is not honorary. They have a profound legal and ethical obligation—a fiduciary duty—to manage your affairs prudently and in the sole interest of your beneficiaries.
Too often, I see people choose fiduciaries based on emotion. They might name their eldest child to avoid offending the others, even if that child is financially irresponsible. They might name a close friend who is kind and trustworthy but lacks the financial sophistication or emotional fortitude to manage a complex estate and family dynamics.
Being an executor in New York is a demanding job. It involves petitioning the Surrogate’s Court for authority, gathering and inventorying assets, paying debts and taxes, managing investments, and ultimately distributing the estate according to the will. This process is overseen by the court and subject to strict legal standards. A misstep can expose the fiduciary to personal liability. The law is clear on this—for example, the Surrogate’s Court Procedure Act (SCPA) §711 lists more than a dozen reasons for which a fiduciary can be removed, including wasting assets or being dishonest.
The right choice is not always the obvious one. It requires an honest assessment of who in your life has the integrity, competence, and time to take on this critical role of stewardship.
Mistake 3: Relying on Joint Ownership as a Will Substitute
Many people add a child to their bank accounts or to the deed of their home as a joint owner. The thinking is often that it’s a simple way to avoid probate. Upon the parent’s death, the asset automatically passes to the surviving joint owner. While simple, this approach is fraught with peril.
First, it can unintentionally disinherit your other children. If you have three children but only put one on the deed to your house as a joint tenant with rights of survivorship, that one child legally owns the entire house upon your death. Your will, which may have stated your assets should be divided equally among all three children, is irrelevant to that property.
Second, you expose the asset to the joint owner’s personal creditors. If the child you add to your bank account gets divorced, sued, or files for bankruptcy, the money in that “joint” account can be seized to satisfy their debts. You may have intended it as your emergency fund, but the law now sees it as their asset, too.
There are far better, more deliberate ways to transfer assets and manage your affairs. Trusts, for instance, can achieve the goal of avoiding probate without the significant risks that come with joint ownership. A revocable living trust allows you to maintain full control of your assets during your lifetime while ensuring they are managed and distributed exactly as you wish after your death.
An estate plan is more than a set of legal documents. It is the final act of care you provide for your family. Avoiding these common mistakes requires a shift in mindset—from seeing this as a one-time task to embracing it as an ongoing process of intentional legacy planning.
A good first step is to perform an honest self-audit. Gather your existing will, any trust documents, and the most recent statements for your life insurance and retirement accounts. Look at the names listed as beneficiaries and fiduciaries. If you haven’t reviewed them in the last five years, it is time to do so.
