6 Estate Planning Mistakes I’d Never Make as an Asset Protection Specialist
Here are six things I would never do—and what I recommend instead to ensure your estate is protected and your loved ones are truly taken care of.
1. Leaving Assets Directly to My Partner or Children in a Will
What not to do:
Leave money or property to your partner or children directly through your will.
What to do instead:
Use a lifetime trust. This allows your loved ones to be both trustees and beneficiaries, giving them access and control without exposing the assets to risks like creditors, lawsuits, or divorce. Trusts also offer a smoother transition and better protection across generations.
2. Naming My Family as Life Insurance Beneficiaries
What not to do:
Name your partner or children directly on your life insurance policy.
What to do instead:
Set up a life insurance trust. This way, the payout from the policy goes into the trust, not directly to your beneficiaries. The trust can then distribute funds according to your wishes. Bonus: a life insurance trust is generally free to create and adds a layer of protection and flexibility.
3. Adding My Children’s Names to My Home to Avoid Care Fees
What not to do:
Add your children’s names to your home’s title in an effort to avoid long-term care costs.
What to do instead:
Place your home in a lifetime trust and name your children as trustees and beneficiaries. This keeps your home protected while avoiding the complications that come from shared ownership—including tax issues and potential loss of control.
4. Putting Family Members on My Bank Accounts
What not to do:
Add your partner or children directly to your bank accounts.
What to do instead:
Create a lasting power of attorney (LPA) and name them as your attorneys. This gives them legal authority to manage your finances on your behalf without exposing your accounts to their creditors or legal issues. It also avoids complications if they predecease you or face financial trouble.
5. Trying to Avoid Taxes or Fees by Changing My Property Deed
What not to do:
Add your partner or children to the deed of your principal residence to reduce inheritance tax or avoid care costs.
What to do instead:
Transfer the home into an irrevocable lifetime trust. This not only helps shield your home from care costs and probate but also preserves the full value of your property without the risks of joint ownership. It’s one of the most powerful ways to protect your biggest asset.
6. Leaving My Family to Deal with Probate
What not to do:
Rely solely on a will and force your family to go through probate.
What to do instead:
Use a lifetime trust to avoid probate altogether. Probate can be expensive, time-consuming, and emotionally draining. By using a trust, you make it much easier for your loved ones to access and manage the assets you leave behind.
Final Thoughts: The Smart Way to Plan
Everything I’ve mentioned here comes down to one key principle: don’t put other people’s names on your stuff as a shortcut to estate planning. Doing so often creates more problems than it solves—legal, tax, and ownership issues that can derail your goals.
The good news? You don’t have to figure it out alone. While this advice is solid, every family’s situation is different. To get the best results, talk to a qualified estate planning attorney in your state who understands the laws and can tailor a plan to your needs.
Estate planning isn’t just for the wealthy. It’s one of the best things you can do for your family’s future. Get it done—and thank yourself later.
Like this advice? Share it with someone who needs to hear it. And don’t forget to consult a pro before making any big decisions.