One of the most significant mistakes is failing to make a valid will. Without a will, your estate will be distributed according to intestacy laws in your state or territory. This may not align with your wishes and can create disputes among family members.
How to avoid it: Draft a valid will with the assistance of an estate planning lawyer to ensure your assets are distributed according to your intentions.
Using DIY Will Kits
While DIY will kits may appear cost-effective, they often fail to account for complex family arrangements, blended families, or taxation considerations. Poorly drafted wills can be contested in court, causing stress and financial strain for your loved ones.
How to avoid it: Engage a professional specialising in Wills & Estate Planning Law who can tailor your will to your circumstances and ensure it is legally binding.
Forgetting to Update Your Will
Life events such as marriage, divorce, the birth of children, or the acquisition of significant assets can make an old will outdated. An outdated will may not reflect your current wishes and can leave family members unintentionally excluded.
How to avoid it: Review and update your will regularly, particularly after major life changes.
Overlooking Superannuation and Insurance
Superannuation and life insurance policies are not automatically covered by your will. They require separate beneficiary nominations, which if left incomplete, can result in delays and disputes.
How to avoid it: Make binding death benefit nominations for your superannuation and ensure your life insurance beneficiaries are up to date.
Not Planning for Incapacity
Estate planning is not only about what happens after death. It also involves planning for the possibility that you may become unable to make decisions due to illness or injury.
How to avoid it: Put in place enduring powers of attorney and enduring guardianship documents to appoint trusted individuals who can manage your financial, health, and personal decisions if you lose capacity.
Ignoring Tax Implications
Inheritance can trigger tax obligations, particularly where property or investments are involved. Failing to plan for capital gains tax or other liabilities may reduce the value of what your beneficiaries ultimately receive.
How to avoid it: Seek legal and financial advice to structure your estate in a tax-efficient way, ensuring maximum benefit for your loved ones.
Excluding Family Members Without Consideration
Leaving someone out of your will, such as a child or spouse, can give rise to family provision claims. This often results in costly and emotionally draining litigation.
How to avoid it: If you wish to exclude a family member, seek professional legal advice and consider providing an explanation in your estate planning documents.
Not Seeking Professional Advice
Perhaps the most common mistake is assuming estate planning is simple and can be handled without professional guidance. Every family’s situation is unique, and poorly handled estate planning can cause significant long-term consequences.
Estate planning is about more than drafting a will—it’s about ensuring peace of mind for you and security for your loved ones. Avoiding these common mistakes can prevent costly disputes and ensure your assets are distributed as you intend.
Don’t let avoidable mistakes put your family’s future at risk.
