Avoid These 5 Costly Estate Planning Mistakes New Yorkers Often Make Before Year-End

Estate planning isn’t just for the wealthy; it’s for anyone who wants to make sure their assets, healthcare decisions, and loved ones are protected. Yet, many New Yorkers overlook key parts of the process. From forgetting to update beneficiary forms to relying solely on a will, these estate planning mistakes can cost families time, money, and peace of mind. As the year ends, now is the perfect time to review your plan and make sure it’s still serving your needs.

Mistake #1: Not Having an Estate Plan at All

One of the most common and expensive estate planning mistakes is simply not having a plan in place. According to surveys, only about a third of Americans have an estate plan. Without one, your estate will likely go through probate, and the state, not you, will decide how your assets are distributed.

This can lead to unintended results, such as:

• Assets going to an ex-spouse or estranged family member
• Costly court proceedings and legal delays
• Added emotional stress for grieving loved ones

Creating a comprehensive estate plan ensures your wishes are honored and your family is protected.

Mistake #2: Relying Only on a Will

A will is important, but it’s not the full picture. Assets that pass through a will must go through probate, a court process that can take months and expose your estate to creditors.

To avoid these issues, many New Yorkers include trusts in their estate plans. Trusts allow assets to be transferred directly to beneficiaries without going through probate. They can also provide privacy and protection against certain taxes or claims.

Mistake #3: Forgetting to Update Beneficiaries

Beneficiary designations on accounts such as life insurance, IRAs, and 401(k)s override what’s written in your will. If you forget to update them after major life changes, such as marriage, divorce, or the birth of a child, your assets could go to the wrong person.

Regularly review your beneficiary designations, especially before year-end. Ensure the correct individuals or trusts are listed on all financial accounts.

You may also want to:

• Review old retirement accounts from past employers; beneficiaries don’t automatically transfer when you change jobs.
• Check life insurance policies and investment accounts for outdated or missing beneficiary forms.
• Confirm that contingent (secondary) beneficiaries are also listed in case your primary beneficiary cannot inherit.
• Coordinate your beneficiary designations with your overall estate plan so everything works together, not against each other.

Mistake #4: Ignoring Tax Implications

Estate and gift taxes can take a significant bite out of what you leave behind. New York has its own estate tax rules that differ from the federal rules. Gifting assets during your lifetime can be a useful strategy, but if done incorrectly, it could create an unwanted tax burden for your heirs.

An estate planning attorney can help you structure gifts and charitable donations in ways that minimize taxes while supporting your long-term goals. Planning, rather than waiting until tax season or retirement, is key.

Mistake #5: Failing to Update or Review Your Plan

Your estate plan isn’t a “set it and forget it” document. Life changes like marriage, divorce, the birth of a child, or purchasing a new home require updates to your estate plan.

It’s a good idea to review your plan every three to five years, or anytime there’s a significant life event. Keeping it current ensures your plan continues to reflect your wishes and protects your family as intended.

Here are a few examples of life changes that may require updating your estate plan:

• Marriage or divorce
• Birth or adoption of a child or grandchild
• Buying or selling a home or business
• Major changes in your financial situation
• The death or incapacity of a named executor, trustee, or guardian

Additional Tips to Avoid Estate Planning Mistakes

Avoiding estate planning mistakes is about regular maintenance and honest communication with family members and trusted advisors. These additional steps can help you strengthen your plan and avoid future problems:

• Don’t do it yourself. Online forms may seem convenient, but they often miss key details specific to New York law.
• Choose your executor carefully. The person you select should be responsible, organized, and able to handle potential family conflicts.
• Plan for incapacity. Make sure you have a durable power of attorney and healthcare proxy in place in case you can’t make decisions for yourself.

Key Takeaways

Avoiding these common estate planning mistakes can save your loved ones from stress, confusion, and unnecessary costs. Take time before the end of the year to:

• Create or update your estate plan
• Review beneficiary designations
• Consider trusts and tax strategies
• Update your healthcare and power of attorney documents

Don’t Wait to Update Your Estate Plan 

If you’ve been putting off reviewing or creating your estate plan, now is the time to act. A thoughtful plan can help protect your assets, reduce stress for your family, and give you peace of mind heading into the new year. Parker Law Firm helps New Yorkers create plans that reflect their goals and values so their loved ones are cared for no matter what the future brings. Book a call today to review your estate plan. 

References: MSN (June 24, 2025) “15 Estate Planning Mistakes That Can Cost Families $100,000+” and GO Banking Rates (Nov. 17, 2024) “4 Expert Insights on Avoiding Estate Planning Pitfalls for 2025”