Vanilla

Sep 25, 2025

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45,000 Documents Later: The Most Common Estate Planning Mistakes

Estate planning is one of the most impactful ways advisors can help clients protect their families, preserve wealth, and ensure their intentions are honored. Yet, despite its importance, we’ve seen time and again that estate plans—even carefully drafted ones—often contain blind spots.

At Vanilla, we’ve abstracted over 45,000 estate planning documents. This vantage point provides a unique window into the recurring mistakes and oversights that surface in client plans. For advisors, understanding these pitfalls is critical not just for catching errors, but also for building trust and proactively guiding clients through difficult conversations.

Below are the most common mistakes we see—and how you, as a financial advisor, can help clients avoid them.

Top 8 estate planning mistakes to avoid

1. Underestimating insurance needs

One of the clearest risks in many plans is insufficient life insurance, as clients often underestimate the amount of coverage their family would need if they were no longer here. Policies that looked sufficient a decade ago may no longer match current income levels, debt, or lifestyle expectations.

Advisor takeaway: Incorporate insurance reviews into your regular planning cycle. Stress-test scenarios with clients: if something happened tomorrow, would the surviving spouse and children be financially secure?

2. Outdated beneficiary designations

It’s surprisingly common for beneficiary designations on retirement accounts, insurance policies, or bank accounts to contradict what’s in the will or trust. Divorce, remarriage, or the birth of new children often leads to gaps that can cause assets to transfer in unintended ways.

Advisor takeaway: Make beneficiary audits routine. Ensure designations are aligned with the overall estate plan and updated after major life events.

3. Neglecting digital assets

From cryptocurrency wallets to social media accounts, digital assets are increasingly part of a client’s estate—yet many plans make no mention of them. Without clear instructions, families can may lose access or control over digital assets or accounts.

Advisor takeaway: Educate clients about digital estate planning and encourage them to inventory their digital assets, set up secure access, and specify who should manage them.

4. Failure to address incapacity

Estate plans often focus exclusively on what happens after death, and fail to address what happens if the client becomes incapacitated. Without clear powers of attorney and healthcare directives, families can be unnecessarily faced with difficult decisions and disagreements.

Advisor takeaway: Ensure every plan includes a comprehensive incapacity strategy. These documents protect clients while living and can help their loved ones avoid emotionally draining conflicts.

5. Ignoring estate taxes and state-specific rules

Some clients mistakenly assume estate tax is irrelevant to them, either because they’re below the federal exemption or because they don’t realize their state imposes its own estate or inheritance tax. Similarly, clients who move across state lines may not consider that tax laws vary from state to state. 

Advisor takeaway: Keep a close eye on both federal and state estate tax laws, and make sure to discuss potential tax implications with clients who are planning to relocate. 

6. Poor trust funding

Unfunded or partially funded trusts crop up more often than one might expect. Clients spend the time and money to create a trust, only to leave major assets titled in their individual names. When this happens, the estate still goes through probate, essentially defeating the purpose of the trust.

Advisor takeaway: Work alongside attorneys to ensure clients complete the trust funding process. Review asset titling regularly—especially after significant purchases or liquidity events.

7. Lack of communication with heirs

Estate plans may seem airtight on paper, but when heirs are blindsided, the result is often confusion, conflict, and even litigation. Helping clients facilitate these conversations with beneficiaries can protect both their estate and their families from dispute. 

Advisor takeaway: Encourage open, age-appropriate conversations between clients and their heirs. It may be helpful to frame it not as disclosing numbers, but as preparing the next generation and reducing potential family strife.

8. Forgetting to revisit the plan

Life changes fast—marriages, births, divorces, relocations, and business exits can all reshape a client’s financial picture. However, many clients (and advisors) treat estate planning as a “one and done” exercise. Too often, clients’ estate plans don’t align with their current wishes or situation at the time of death. 

Advisor takeaway: Build estate plan reviews into your standard service model. A good rule of thumb is to revisit documents every three to five years, or immediately after a major life event.

Advisors are in a unique position to spot these estate planning red flags before they become costly problems, and your clients and their families will thank you for it. 

From the 45,000 documents Vanilla’s team has abstracted, one truth is clear: the best estate plans are dynamic, collaborative, and frequently reviewed. By addressing these common mistakes, you can help clients secure their legacy, protect their families, and build deeper, more enduring trust in your advisory practice.

To learn more about how Vanilla can help you spot estate planning mistakes proactively and streamline the planning process, schedule a demo.