Last month, a 78-year-old client asked me to review his trust. He’d named his 82-year-old brother as successor trustee. The brother lives in Florida, has early-stage dementia and hasn’t managed his own finances in nine years. The trust had $4 million in assets and no removal provisions. When I pointed this out, the attorney who drafted it five years ago said, “The client insisted on family.” That’s not estate planning. That’s a disaster waiting for probate court.
Estate planning failures like this happen on a daily basis, creating problems across thousands of estate plans, but they’re entirely preventable.
The five mistakes outlined below affect every type of client, from modest estates to ultra-high-net-worth families. They cut across all planning strategies, whether you’re working with revocable living trusts, irrevocable life insurance trusts or simple wills. With the passage of the One Big Beautiful Bill Act, reviewing existing documents has never been more critical. Yet most plans sit untouched for years, accumulating problems—much like accruing compound interest on a bad loan.
1. Overlooking the Spelling of Names
At risk of stating the obvious, details are crucial in all estate documents, especially when it comes to key roles in a trust (for example, trustees, beneficiaries and trustors) and real property ownership in a trust.
When it comes to key roles, getting people’s names spelled correctly as it appears on their government-issued ID documents and designated roles is crucial. For example, a bank can deny a transfer of assets from a trust to a beneficiary because their name was misspelled in the estate documents compared to their name on their ID. Seems silly, but I’ve seen it happen.
Similarly, real estate titled incorrectly into a trust is another example of how a seemingly innocuous misstep can lead to big consequences. Let’s take a closer look: listing “JQ Public Trust” on a property deed when the trust’s name is “John Q. Public Trust” can cause confusion and unnecessary delays in transferring assets after death. Why? In financial institutions and title companies’ eyes, the trust technically and legally does not own that real property.
As the saying goes, many hands make light work. And when it comes to estate documents, many eyes catch incorrect work – always have an extra two or three people review each and every document that’s part of your clients’ estate plans. It will slow your overall review process down, but as the U.S. Navy SEALs would say, “Slow is smooth, smooth is fast.”
2: Not Funding the Trust
Think of a trust as a safe. Your clients can fill a trust with the things they want their trustees to control. Real estate, bank accounts and other assets are must-haves to fund a trust. Much like an empty safe, what good is an unfunded trust? The benefit of avoiding probate is lost when real estate and other assets aren’t titled in the name of the trust.
I’ve seen this movie too many times to count: beautifully drafted trusts with sophisticated tax planning, thoughtful distribution provisions and carefully selected trustees. Then you ask to see the trust’s asset schedule. It’s blank. The house is still in the clients’ individual names. The brokerage accounts list the clients as owners. The business interests were never transferred.
Every asset type requires attention: Real estate needs new deeds recorded with the county. Bank accounts need retitling or beneficiary designations. Investment accounts require new account applications or transfers. Business interests need a business assignment affirming they’re an asset of a trust. Each asset will see its day in probate court if it’s not properly retitled.
This isn’t just about avoiding probate. Unfunded trusts can undermine tax planning strategies, create unintended beneficiary conflicts and expose assets that would otherwise remain private.
The fix requires a checklist system. Before any estate plan is complete, verify every significant asset has been transferred or designated (or help your clients retitle those assets!). Follow up three months later. Check again at annual reviews. Make funding verification as routine as document execution.
3: Failing to Update Beneficiary Designations
It doesn’t matter how carefully you’ve drafted distribution provisions if the client’s individual retirement account still names their ex-husband from 15 years ago as the primary beneficiary. It doesn’t matter that the trust requires equal distribution among three children if the life insurance policy names only one child. Proper asset designation ensures that estate plans are funded. For most people, the bad news is that those assets are typically scattered across multiple institutions with no central tracking.
For example, one of the most common failures I’ve seen is when one spouse dies and the surviving spouse inherits the account, but the surviving spouse never adds a new beneficiary. This is quite common. A trust may be funded with everything except that one account, thus requiring it to go through probate.
The key to avoiding this mistake is to review every beneficiary designation at every client meeting. Keep a master list. Verify that designations align with overall estate planning goals.
4: Picking the Wrong Trustees
Some people should never be trustees, regardless of their relationship to your client. We can see that quite clearly from the example at the beginning of this article. Here are some factors to consider:
Age: Naming someone in their late 70s as a long-term trustee for a young family’s trust is planning for failure. They may not live throughout the entire trust term, and their declining physical and mental capacities could create predictable problems.
Location: A trustee living across the country or internationally faces practical challenges managing and distributing assets and handling estate administration. State laws can also create additional complications.
Financial stability: A trustee with personal financial problems will face conflicts of interest that may jeopardize trust assets.
Family dynamics: This factor is most important. The responsible child who lives nearby seems perfect until you realize they haven’t spoken to their sibling(s) in five years. The trusted friend who “knows the family situation” may not survive the stress of mediating between feuding beneficiaries.
Look for these red flags during document review: (1) sole trustees with no succession plan; (2) trustees with obvious capacity concerns; (3) geographically distant trustees for trusts requiring active management; and (4) family trustee selections that ignore known conflicts.
5: Failing to Notify the Individuals Named in the Estate Plan
An estate plan takes three steps: (1) creating documents; (2) funding documents; and (3) notifying and educating those people named in the documents.
Just as having a securely locked safe filled with tangible assets is beneficial, having a trust properly funded is great, but it doesn’t do a lot of good (at least not in the short term) after someone dies if nobody knows the trust exists or can’t find it. Sure, the loved ones would likely find out when they see the home is titled into the name of the trust. But the last thing your client wants to do after their family member dies is spend a few weeks tracking down where the trust is.
Once you help your clients create and fund their trust, encourage them to provide a short instructional guide to each individual named in the trust. They should let the individuals named as their health care agents know they’ll have the power to talk to a doctor on their behalf. They should also let the guardians know, and hopefully, it’s no surprise that they’ll be guardians of your client’s minor children if something were to happen.
Most importantly, the trustee is the individual who has the keys to the safe, which is the client’s trust. Clients should ensure the trustee knows “where the keys are hanging,” what their powers are as trustee, and how they would access everything if the client were no longer around. Encourage clients to set a master password using a tool like LastPass or 1Password to make their trustees’ lives even easier.
Mistakes are Fixable
The mistakes we’ve discussed in this article are entirely fixable; it just takes some attention and fine-tuning your process as their trusted advisor. Your clients depend on you to catch these issues before their families face the consequences. That’s not just good practice management – it’s the core of what we’re supposed to deliver.
