5 Estate Planning Mistakes That Could Cost Your Family — And How to Avoid Them

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When protecting your legacy, even a small oversight in your estate plan can have significant consequences. From outdated beneficiary designations to missed tax-saving opportunities, common estate planning mistakes can create confusion, trigger unnecessary taxes, or even lead to family disputes. Here are 5 Estate Planning Mistakes That Could Cost Your Family.

1. Overlooking Non-Probate Assets

Not all assets pass through a will or trust. Retirement accounts like IRAs and 401(k)s, life insurance policies, annuities, and even certain bank or investment accounts often include beneficiary designations. These assets transfer directly to the named beneficiary — no matter what your will or trust says.

The risk: Your carefully crafted plan might direct one person to inherit your estate, but if your beneficiary designations aren’t updated, your assets could go elsewhere entirely.

2. Missing the Double Exclusion for Married Couples

5 Estate Planning Mistakes

Each spouse is entitled to a federal estate tax exclusion. However, if one spouse leaves everything outright to the other, the first spouse’s exclusion can be lost.

The solution: Using a credit shelter trust (also called a family trust) allows both spouses to take full advantage of their individual exclusions — which can significantly reduce estate taxes for your heirs.

3. Ignoring State Estate and Inheritance Taxes

Even if your estate is safe from federal estate taxes, some states impose their own estate or inheritance taxes. These can catch families off guard — especially if the estate plan was only designed to minimize federal taxes.

What to do: A flexible estate plan can help reduce or delay state-level taxes. In some situations, lifetime gifts may also help, since many states don’t tax gifts the same way they tax estates.

4. Overlooking Income Tax Implications

Estate tax isn’t the only tax to consider. Income tax issues often have a larger impact on your beneficiaries. For example, appreciated assets gifted during your lifetime don’t receive a “step-up” in basis — meaning your heirs could face significant capital gains tax if they sell those assets later.

Smart move: Consider leaving appreciated assets in your estate so they receive a step-up in basis at your death, and gift assets like cash during your lifetime instead.

5. Not Using Trusts for Non-Tax Protection

Trusts aren’t just for tax planning. They can protect beneficiaries from poor spending habits, creditors, lawsuits, or divorcing spouses.

The takeaway: Even when taxes aren’t an issue, trusts can offer valuable control and protection — especially if your beneficiaries are young, financially inexperienced, or at risk for outside claims.

Avoiding These Mistakes Starts with the Right Guidance
These are just a few of the estate planning errors that can undermine your goals. An attorney who focuses exclusively on estate planning can help you build a plan that truly reflects your wishes — while avoiding costly and common missteps.

Ready to take the next step toward peace of mind? Whether you’re creating a plan from scratch or need a second look at an existing one, we’re here to guide you every step of the way. Call us at 817.899.3286 or visit our contact page to schedule your personal consultation. At McGee Law Firm, we take the time to listen, understand your goals, and help you protect the people and the legacy you love. avoid — and how working with an experienced estate planning attorney can help you steer clear of them.

From the desk of Attorney Brandon McGee

Brandon McGee
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