5 Estate Planning Mistakes Long Island Families Make

Estate plans rarely fail because of something clever. They fail because of something ordinary that nobody checked. These are the five we see most often.

The first is beneficiary designations that contradict the will. Retirement accounts and life insurance pass by designation, not by will, and the designation wins. A form completed decades ago and never revisited can send a substantial asset to someone the will never contemplated.

The second is a trust that was drafted and never funded. A trust only governs what is actually transferred into it. An unfunded trust is an expensive document that does nothing, and this is more common than it should be.

The third is naming a fiduciary for the wrong reason. The eldest child is not automatically the right executor, and neither is the one who lives closest. The job requires organization, patience, and a willingness to be unpopular with siblings.

The fourth is leaving the house to several children jointly without saying what should happen to it. Two want to sell, one wants to keep it, and the estate stalls. A sentence in the plan prevents years of difficulty.

The fifth is treating the plan as finished. Marriages, divorces, births, deaths, a move into or out of New York, and any significant change in assets are all reasons to look at it again. A plan that was right in 2012 may not be right now.

None of these require a complicated fix. They require somebody looking.