5 Estate Planning Mistakes That Could Cost Your Family
Avoid these common estate planning errors that can lead to family conflict, unnecessary taxes, and your wishes being ignored. Learn how to protect your legacy.
5 Estate Planning Mistakes That Could Cost Your Family
Estate planning isn’t just for the wealthy. Anyone who owns property, has children, or wants to control what happens to their assets needs a plan. Unfortunately, many people make mistakes that can cause significant problems for their families. Here are five common errors and how to avoid them.
Mistake #1: Not Having a Plan at All
The most damaging mistake is having no estate plan whatsoever. Without at least a basic will, Illinois intestate laws determine who inherits your property—and the results often surprise families.
What happens without a will:
- Your spouse may not inherit everything (children get a share)
- Stepchildren and unmarried partners inherit nothing
- A judge—not you—chooses who raises your minor children
- Court supervision increases costs and delays
- Family members may fight over your intentions
The fix: Create at minimum a will, financial power of attorney, and healthcare power of attorney. These documents take only a few hours to prepare and provide essential protection for your family.
Mistake #2: Failing to Update Your Plan
Life changes. Your estate plan should change too. Yet many people create documents and file them away for decades, never updating them as circumstances evolve.
When to review your estate plan:
- Marriage, divorce, or remarriage
- Birth or adoption of children or grandchildren
- Death of a beneficiary or named fiduciary
- Significant changes in assets or financial situation
- Moving to a new state
- Changes in tax laws
- Every 3-5 years even without major life changes
Common problems with outdated plans:
- Ex-spouse still named as beneficiary or executor
- Deceased individuals listed as agents or guardians
- Children now adults but treated as minors in the documents
- New property not covered by the trust
- Plans don’t reflect current family relationships or wishes
The fix: Review your estate plan whenever major life events occur. Set a calendar reminder to review every three years, even if nothing has changed.
Mistake #3: Ignoring Beneficiary Designations
Your will doesn’t control everything. Many assets pass directly to named beneficiaries, regardless of what your will says:
- Life insurance policies
- Retirement accounts (IRAs, 401(k)s, pensions)
- Bank accounts with payable-on-death designations
- Investment accounts with transfer-on-death designations
The danger: These designations override your will. If your will says “leave everything to my wife” but your life insurance still names your ex-wife from 20 years ago, the ex-wife gets the insurance proceeds. Courts have consistently upheld beneficiary designations over conflicting will provisions.
Common beneficiary mistakes:
- Naming an ex-spouse you forgot to update
- Naming minor children who can’t legally receive assets
- Naming a child with disabilities who would lose government benefits
- Naming a deceased person with no contingent beneficiary
- Failing to name any beneficiary at all
The fix: Request beneficiary designation forms from every financial institution and insurance company. Review them alongside your will to ensure they work together. Update immediately after any life change.
Mistake #4: DIY Estate Planning Gone Wrong
Online legal services and form books make it tempting to handle estate planning yourself. While some people successfully create basic documents this way, many others create plans with serious flaws.
Problems with DIY estate planning:
- Forms may not comply with Illinois law requirements
- Generic language doesn’t address your specific family situation
- Execution errors (witnesses, notarization) can invalidate documents
- No one explains options or helps you think through implications
- Tax planning opportunities are often missed
- Disability planning is frequently overlooked
When DIY is most dangerous:
- Blended families with children from prior relationships
- Family members with special needs
- Significant assets requiring tax planning
- Business ownership
- Real estate in multiple states
- Any complexity beyond a simple family structure
The fix: Work with an experienced estate planning attorney. Flat-fee pricing makes professional help more affordable than many expect, and the peace of mind knowing your documents are legally sound is invaluable.
Mistake #5: Not Planning for Incapacity
Many people focus entirely on what happens after death but forget that they may become incapacitated while still living. Without proper documents, your family may face a court guardianship proceeding just to manage your finances or make medical decisions.
Essential incapacity documents:
Financial Power of Attorney: Names someone to manage your finances if you can’t—paying bills, managing investments, filing taxes, handling real estate, and more. Without this, even your spouse may not be able to access accounts in your name alone.
Healthcare Power of Attorney: Names someone to make medical decisions when you can’t communicate your own wishes. This includes decisions about treatments, surgeries, medications, and care facilities.
Living Will: Documents your preferences for end-of-life care, including whether you want life-sustaining treatment if you’re terminally ill or permanently unconscious. Gives your healthcare agent guidance for difficult decisions.
What happens without these documents: Someone must petition the court to be appointed as your guardian. This process takes weeks or months, costs thousands in legal fees, requires ongoing court supervision, and may result in someone you wouldn’t have chosen making decisions for you.
The fix: Include powers of attorney and a living will in your estate plan. Choose agents you trust completely, and discuss your wishes with them so they understand your values and preferences.
Taking Action
Estate planning doesn’t have to be complicated or expensive. A basic plan covering the essentials—will, powers of attorney, and beneficiary review—can be completed in a matter of weeks and provides crucial protection for your family.
The worst time to discover your estate plan has problems is when your family needs it most. Don’t leave your loved ones to sort out a mess during an already difficult time.
At Skokie Probate Lawyer, we offer flat-fee estate planning with no hourly billing surprises. We’ll take time to understand your family’s unique situation and create a plan tailored to your needs—whether that’s a basic will package or a comprehensive trust-based plan.
Call (847) 410-9131 to schedule a consultation. We’ll explain your options clearly and help you protect the people you love most.
Most people assume estate planning is about dividing up wealth, but we see it differently. From our perspective, a good plan is really about protecting your family from unnecessary court battles and the crushing costs of long-term care.
You know how quickly a single medical crisis can drain a lifetime of savings? We are here to help you prevent that.
Let’s look at the data on why families lose assets, the specific laws that catch people off guard, and five practical ways you can secure your legacy right now.
Mistake #1: Relying on the State to Decide (Intestacy)
The single most damaging mistake is assuming your spouse will automatically inherit everything if you don’t have a will. We often have to explain to surprised widows that this is simply not true under Illinois law.
The Reality of Intestacy Laws: According to Illinois statute 755 ILCS 5/2-1, if you pass away without a will and have both a spouse and children, your spouse does not get 100% of your estate. instead, the law mandates a strict 50/50 split:
- 50% goes to your spouse.
- 50% goes directly to your children.
This division can be disastrous for seniors. If your surviving spouse needs those funds to pay for their own living expenses or nursing home care, they may be forced to rely on their children to voluntarily give the money back.
The Risk to Medicaid Eligibility: This unintentional inheritance can also disqualify your spouse from Medicaid. A sudden influx of assets (even just 50% of the house or bank account) can put them over the asset limit, forcing them to “spend down” that money on private care before coverage kicks in.
The Fix: Draft a clear will that explicitly states your distribution wishes. We recommend reviewing how this interacts with your Medicaid planning to ensure your spouse is protected, not penalized.
Mistake #2: Failing to Update for the “2026 Cliff”
Life changes, but so do tax laws. We are currently warning all our clients about the upcoming sunset of the Tax Cuts and Jobs Act provisions at the end of 2025.
Why 2026 Matters for Your Wallet: Unless Congress acts, the federal estate tax exemption is scheduled to drop from approximately $13.6 million down to roughly $7 million (indexed for inflation) on January 1, 2026.
- The Illinois Gap: Remember that Illinois has its own separate estate tax exemption of only $4 million, which is not indexed for inflation.
- The Result: If your estate exceeds $4 million, your family could face a steep state tax bill even if you owe nothing to the federal government.
The Medicaid Look-Back Trap: Updates aren’t just about taxes; they are about timing. Medicaid enforces a strict 5-year look-back period on asset transfers. If you wait until a diagnosis to update your plan and move assets, you will likely be penalized for every dollar you transfer.
The Fix: Review your estate plan specifically for the 2026 tax changes and the 5-year Medicaid window. We suggest setting a calendar reminder to review your plan every three years, or immediately after any major health diagnosis.
Mistake #3: Ignoring the “Super-Will” Power of Beneficiaries
Your will does not control every asset you own. In fact, for many seniors, the most valuable assets—retirement accounts and life insurance—bypass the will entirely.
The “Egelhoff” Principle: Courts have consistently ruled that the name on the beneficiary form overrides the name in the will. If your will says “leave everything to my current wife” but your 401(k) still lists your ex-spouse from 20 years ago, the ex-spouse gets the money.
| Asset Type | Controlled By Will? | Controlled By Beneficiary Form? |
|---|---|---|
| Bank Accounts | No | Yes (Payable on Death) |
| Life Insurance | No | Yes (Policy Designation) |
| Real Estate (standard) | Yes | No |
| Real Estate (TODI) | No | Yes (Transfer on Death Instrument) |
An Insider Tool: The Illinois TODI: Illinois allows a specific tool called a Transfer on Death Instrument (TODI) (755 ILCS 27/). This document lets you name a beneficiary for your home effectively bypassing probate just like a life insurance policy.
The Fix: Request a “Change of Beneficiary” form from every financial institution you use. We advise clients to make sure these match their current estate plan exactly to avoid conflicting instructions that lead to litigation.
Mistake #4: Using DIY Kits for Complex Care Needs
Online legal forms are tempting, but they are often disastrous for seniors facing long-term care needs. We frequently see generic “Revocable Living Trusts” sold in DIY kits that offer zero protection against nursing home costs.
The Critical Distinction:
- Revocable Living Trust: Good for avoiding probate. Bad for Medicaid planning because the assets are still considered “available” to you.
- Medicaid Asset Protection Trust (MAPT): A specific irrevocable trust designed to protect assets from being seized for nursing home costs.
The Cost of “Cheap” Documents: Correcting a failed DIY plan in probate court is expensive. In Illinois, probate fees typically run between 4% and 8% of the estate’s total value.
- On a $300,000 home, that is $12,000 to $24,000 in fees that could have been avoided.
- Comparing this to the cost of a professional plan makes the value of expert help clear.
The Fix: Work with an attorney who specializes in elder law, not just general estate planning. We can help you determine if a standard trust or an asset-protection trust is right for your specific health and financial situation.
Mistake #5: Forgetting the “Living” Side of Planning
Most people focus on what happens after they die. We urge you to focus on what happens if you live but cannot make decisions for yourself.
The High Cost of Guardianship: Without a Power of Attorney, your family cannot access your bank accounts to pay your bills if you are incapacitated. Their only option is to sue for guardianship.
- Financial Burden: Obtaining guardianship in Cook County typically costs between $4,000 and $5,000 in initial legal and filing fees.
- Ongoing Hassle: It requires annual reports to the court and permanent judicial oversight of your spending.
Essential Documents to Sign Now:
- Illinois Statutory Short Form Power of Attorney for Property: This specific form grants your agent the authority to handle real estate, taxes, and claims.
- Healthcare Power of Attorney: Designates who makes medical decisions when you cannot communicate.
The Fix: Sign these documents while you are healthy and competent. We recommend naming a backup agent in case your primary choice is unable to serve when the time comes.
Taking Action
Estate planning is not just about paperwork; it is about peace of mind. A proper plan shields your spouse from intestacy laws, protects your life savings from probate fees, and ensures you qualify for the care you need.
The worst time to fix these mistakes is during a crisis. We encourage you to take control of your legacy today so your family isn’t left sorting out the details tomorrow.
At Skokie Probate Lawyer, we offer flat-fee estate planning with no hourly billing surprises. We will take the time to understand your family’s unique situation and create a plan tailored to your needs—whether that is a basic will package or a comprehensive trust-based plan.
Call (847) 410-9131 to schedule a consultation. We will explain your options clearly and help you protect the people you love most.
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Zisl Edelson
Zisl Edelson is an elder law and estate planning attorney serving families in Skokie and throughout Cook County. With a J.D. and M.B.A. from the University of Chicago, he brings both legal expertise and financial acumen to help families protect their assets and plan for the future.