10 Estate Plan Pitfalls to Avoid – Fidelity

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Getting the various documents together and signing them is just the first step in estate planning. A constant review and update of your estate plan will help you avoid the risk of an outdated estate plan. Possible reasons for updating an estate plan include changes in tax rate, life events such as birth, death, divorce, relocation, marriage, etc. it is advisable to constantly update your estate plan at a regular interval of 3 to 5 years depending on the situation of things. An outdated estate plan might have negative effects and pitfalls, some of them are listed below. If you happen to fall among any category, go ahead and update your estate plan.

Effect of outdated estate plan on chosen fiduciaries

A fiduciary is someone whom you chose to take legal charge over assets for the benefit of another person (the beneficiary).  In estate planning, there are two kinds of fiduciaries

  • The Executor
  • A Trustee

The executor: this is the person who is named in a will to see to the distribution of your estate at your death. You should inform the executor of his role. The duties of the executor include paying tax, settling creditor, etc.

A trustee: A trustee is a person whom the trustor has given legal ownership of an asset for the benefit of another person (the beneficiary). The trustee is the one in charge and in control of the assets that are in the trust and at the stipulated time; the assets are transferred to the beneficiaries.

An outdated estate plan can have effect on the fiduciary in the sense that; when you made your choice of fiduciaries, the people you picked were probably right and suitable for the role as at then. Now things might have change, they might have grown old, left practice (if you chose an attorney as a client); fallen sick or they might have even died. This condition might prevent them from acting as a fiduciary for your estate so you need to update your estate plan in case you will need to change a fiduciary.

Outdated estate plan and grown up kids

Probably as at the time of planning your estate, your children were still very young so you had to make provision for them in your estate as minors. Over the years they have grown and become adults, you should revisit your estate plan to update and change these provisions you made. For instance there will no longer be need for naming a guardian.

Change in state laws

An estate plan has to align with the laws of the state where you reside. As at the time you planned your estate certain state laws might have influenced your plan. If these laws change and you fail to update them in your plan, in future they might make your estate plan invalid in court.

Tax exclusion

An outdated estate plan may include plans which were appropriate for estates at much lower exemption values.


As at the time you planned your estate the laws of your state of resident influenced your plan. If you happen to relocate from your former state, an outdated plan will be invalid as it will not correspond to the laws of your new state of residence. Hence the need to update your plan

Plans for charity

If you develop the mind of giving back to the community through charity after making your estate plan, an outdated plan won’t document this intention of yours so an update of your estate plan is required.

Your life insurance policy

An outdated plan won’t reflect recent changes in your life insurance. You have to make sure that your life insurance is in accordance with what is applicable in recent times.

Neglecting long term care

If you planned your estate while you were still young and YOU neglected planning for long term care, now that you are getting old you should review and update your estate plan.

Lack of plan review and update

Making an estate plan is one thing, reviewing and updating your estate plan is another thing on its own.

Doing it yourself

Matters regarding estate planning are legal and professional hence it is important for you to get a well-informed attorney to help you through the process of estate planning. Many errors arise as a result of this mistake. Seek the help of legal personnel. Our attorneys are always available if you need assistance.

DISCLAIMER: The information provided in this blog is for informational purposes only and should not be considered legal advice. The content of this blog may not reflect the most current legal developments. No attorney-client relationship is formed by reading this blog or contacting Morgan Legal Group.

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