7 Critical Mistakes People Make When Reviewing Their Estate Plan

The Smith family (names changed to protect the innocent) thought they were doing everything right. Every January, they dutifully reviewed their estate plan, checking off all the boxes on their attorney's checklist. But when "Harold" passed away in 2024, his children discovered their annual reviews had missed crucial details that cost the family hundreds of thousands in unnecessary taxes and sparked a bitter legal battle between siblings.

Most families think they're protected by their annual reviews (and if you are doing your annual review, congratulations! You're ahead of the curve), but it's not enough to just go through the motions. You need to know what to look for, and also to understand what most people miss as part of the process. 

So let's look at the seven most costly mistakes people make when reviewing their estate plans, and how to avoid them.

1. The "Set and Forget" Beneficiary Trap

Jane learned this lesson the hard way. She diligently reviewed her will every year but forgot about an old 401(k) from her first job that still listed her ex-husband as beneficiary. When she died unexpectedly, her current husband of 20 years almost received nothing from that account—the ex-husband was the one listed, regardless of what her will said. It took some significant legal work after her death to make sure that her current husband wasn't left out in the cold.

This common oversight happens because people:

• Focus only on their will, ignoring retirement accounts and life insurance policies
• Forget about accounts from previous employers
• Don't realize beneficiary designations override will provisions

2. The Digital Asset Blindspot

If your estate plan was drafted years ago, you weren't thinking about cryptocurrency or NFTs and how they needed to be planned for in your estate plan. Today? Families can lose millions when their loved ones can't access digital assets.

Over coffee with a friend, I heard a cautionary tale of her client who lost significant sums of money when his Bitcoin was permanently lost because their annual review never addressed:

• Cryptocurrency wallet access procedures
• Password management systems
• Digital asset inventory updates
• Social media account legacy contacts

3. The "Family Knows Best" Fallacy

Michael assumed his children would fairly divide his art collection after his death. His annual reviews never flagged this as an issue—until his death sparked a three-year legal battle between his kids over a single print (let's make it fun and say it was a Picasso).

Modern families require modern solutions:

• Clear instructions for emotional assets
• Regular family meetings about the estate plan
• Written explanations for potentially controversial decisions
• Updated valuations of significant items

4. The Tax Law Lag

The law surrounding estates generally moves slowly, but there are occasional changes. Often, these changes only effect the ultra-wealthy, but it's still not an excuse for you not to pay attention to the changes. If you miss a change, your family could pay significant taxes that could have been avoided.

Common tax review failures:

• Not adjusting to new state tax laws after moving
• Missing opportunities from recent tax code changes
• Failing to restructure trusts when tax thresholds change
• Overlooking international tax implications for global assets

5. The Capacity Assumption

The Smith family's annual reviews never addressed what would happen if someone became mentally incapacitated. When their mother developed early-onset dementia, they discovered their power of attorney documents were outdated and unusable.

Critical capacity planning elements often missed:

• Regular updates to healthcare directives
• Specific triggers for power of attorney activation
• Long-term care preferences
• Digital access provisions for caretakers

6. The Successor Silence

One of the biggest challenges when creating an estate plan is not who should be the personal representative or the trustee, but who should be the backups. You normally have a clear idea of who you'd like as your primary person for the role, but don't forget that it's often necessary to have at least one backup in your documents.

Key successor issues to review:

• Backup executors and trustees
• Alternative guardians for minor children
• Successor power of attorney agents
• Corporate trustee options as a last resort

7. The Business Blindside

Sarah reviewed her estate plan yearly but never updated her business succession plan. When she died suddenly, her thriving consulting firm collapsed within months, leaving her family with worthless business assets.

Business owner review essentials:

• Updated buy-sell agreements
• Current business valuations
• Key person insurance adequacy
• Succession training progress

Breaking the Annual Review Cycle

There are some easy ways to avoid these 7 mistakes. Some ideas for you to consider:

1. Quarterly Digital Updates
   Track changes in digital assets, accounts, and passwords every three months

2. Biannual Family Meetings
   Hold structured discussions with family members about the plan twice yearly

3. Annual Professional Review
   Work with legal and financial professionals to catch technical issues

4. Trigger Events
   Review immediately after major life changes, don't wait for the annual review

The Smith family now holds monthly family meetings and use a digital estate tracking system.

Your estate plan protects more than assets, it protects relationships and legacies. Don't let an inadequate review process undermine years of careful planning.

Ready to Get Started?

If you need help with these or other estate planning tactics, let's schedule a Legal Strategy Session online or by calling my Edina, Minnesota office at (612) 294-6982 or my New York City office at (646) 847-3560. My office will be happy to find a convenient time for us to have a phone call to review the best options and next steps for you to work with an estate planning attorney.