Estate planning is a vital step in protecting your legacy and ensuring your loved ones are protected. Yet, many individuals unintentionally make mistakes that can lead to confusion, delays, and unnecessary expenses. Below are three common pitfalls—and how you can avoid them.
1) Not Updating Your Documents Regularly
Your estate plan should evolve with your life. Major events such as marriage, divorce, the birth of a child, or the death of a loved one can significantly impact your wishes and the structure of your plan. If your documents aren’t updated, it may lead to unintended consequences—like an ex-spouse remaining as a beneficiary or guardianship designations that no longer reflect your current preferences.
What You Can Do:
Review your estate plan every 3–5 years, or immediately after any major life event. Keeping your documents current ensures your intentions are honored.
2) Failing to Name an Appropriate Executor or Trustee
The person you choose to carry out your estate plan plays a crucial role. An executor or trustee should be responsible, organized, and ideally have some financial or legal knowledge. Naming someone who lacks these qualities—or who may have conflicts with other beneficiaries—can result in delays, disputes, and even litigation.
What You Can Do:
Select someone who is both capable and trustworthy.
3) Overlooking State-Specific & Federal Laws
Estate planning is not a one-size-fits-all process—especially when it comes to navigating both state and federal tax laws. A common misconception is that no taxes are owed after a loved one passes. However, this isn’t always the case. Federal estate tax laws may apply to larger estates, and both New Jersey and Pennsylvania have inheritance taxes.
- The Federal Estate Tax is a tax on the transfer of property at death. It applies to the gross estate, which includes all assets owned or controlled by the decedent at the time of death. For 2026, the federal exemption threshold for individuals is $15 million per individual and $30 million for married couples. An estate tax return (Form 706) must be filed if the gross estate, plus adjusted taxable gifts, exceeds the exemption threshold.
- New Jersey imposes an inheritance tax and is based on both the beneficiary’s relationship to the decedent and the value of the assets received. This tax is due within 8 months of the decedent’s death.
- Pennsylvania imposes an inheritance tax, similarly to New Jersey, where it depends on the beneficiary’s relationship to the decedent. The Pennsylvania Inheritance Tax is due within 9 months of the decedent’s death.
What You Can Do:
It’s essential to work with an attorney who is well-versed in both federal and state-specific laws. A well-informed estate plan can help minimize tax burdens, avoid costly mistakes, and ensure full legal compliance.
Estate planning is more than just paperwork—it’s about peace of mind. Avoiding these common mistakes can help ensure your legacy is preserved and your loved ones are protected.
