Avoiding the BIGGEST Estate Planning Mistake Retirees Make

Retirees beware – there’s a potential ticking time bomb in your estate plan.

Estate planning isn’t something you set and forget. It’s a comprehensive approach to ensuring your wishes are protected that makes life easier for your loved ones.

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An estate plan is dictated through documents: trust, will, financial and medical power of attorney, beneficiary designations, advanced health care directive, and hopefully a list of all your miscellaneous passwords for your email and social media accounts. 

Your trust is executed by a trustee and your will is handled by an executor, whether that’s yourself, a loved one, or a third-party corporation.

It takes a commitment to long-term planning, dedication, and emotional maturity to complete your estate planning documents. If you’ve already set up your estate plan, congratulations! According to a study done by Trust & Will, you are among the less than half of Americans (45%) who have done any estate planning. (https://trustandwill.com/learn/2025-report-press-release/)

After we die, our heirs are tasked with carrying out our wishes and distributing the inheritance to the right beneficiaries. It can be a lot of work even for a responsible trustee to coordinate with the estate’s professional team and ensure all distributions to beneficiaries are happening in a timely and compliant manner.

The purpose of creating your estate plan is to clearly state your wishes so your heirs and trustee don’t have to guess what you “would have wanted”. 

That brings up the biggest estate planning mistake I see…

Once your estate plan is created, it should be reviewed. Estate attorneys recommend a review every 3-5 years, or after a major life event (death, birth, retirement, relocation, etc.) Retirees (especially recent retirees) should consider a 3-year review cycle to keep up with their transition in life. 

The biggest mistake retirees make is not consistently reviewing their estate plan throughout their retirement.

Here’s why that can cause confusion and lost dollars down the road.

Why Outdated Estate Plans Cost Retirees Thousands

Here’s an example of how a “set it and forget it” estate plan can go terribly wrong.

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Lisa and Mark created their estate planning documents with an estate attorney when they retired in their early 60s. They keep all their documents in a binder secured at their home. Now they are both in their early 70s. They live an active lifestyle and love to visit their three young grandchildren whenever possible. They haven’t reviewed their estate plan since creating it, which opens the door for potential issues down the road.

Lisa and Mark’s Estate Planning Issues: 

• When they created their estate plan, they named their oldest daughter as their agent for medical power of attorney. She has since moved to another state across the country and started her own family. They may prefer naming a medical PoA agent who is closer to them and can more easily be in touch with their doctors. 

• Lisa and Mark feel strongly about leaving a legacy for their three grandchildren. Their grandchildren were not born when they first created their trust - it needs to be updated to reflect their legacy plans.

• After seeing his own parents’ end of life experience in the last 10 years, Mark is rethinking his wishes should he be faced with a life-threatening condition. He needs to update his living will.

• Lisa has an IRA that names her late sister as her primary beneficiary and no contingent beneficiary. She needs to update her beneficiary designations with the IRA custodian to avoid confusion and the probate process, which can cost thousands of dollars in court filing and attorney fees.

  
  

And more potential issues…

How to Keep Your Estate Plan Updated

Here’s a simple process to follow so you keep your estate plan updated throughout your retirement.

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1. Every year, review beneficiary designations on all your accounts. This includes your IRAs, employer-sponsored retirement plans, bank accounts, insurance policies, and more.

2. Every 3-5 years, conduct a review of your estate plan. This usually involves working with an estate attorney. The attorney will review the titling of your assets and may amend your estate documents to address any complexities or law changes that have occurred recently. If you work with a financial advisor, they can serve as a catalyst to kick-off the review process by reminding you to get it done on schedule and providing the estate attorney with an updated list of your assets and debts.

3. Communicate with your advisors. Be aware of events in your life which may require an update to your estate plan and inform your financial advisor and estate attorney when they occur. Most commonly this will be when you:

   • Retire! This affects your income, assets, and most importantly, may cause you to re-think what goals are important to you.

   • Lose a loved one: This affects who you name as your beneficiary, trustee, and agent.

   • Relocate to another state or country: Estate laws can vary significantly by state and country. 

   • Marriage and divorce: Both events will likely change who you name as a beneficiary of your assets. Failing to update your estate plan after a divorce can mean unintentionally leaving your money to an ex-spouse. Yikes!

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Key Takeaways

• The biggest mistake in estate planning is not reviewing your plan regularly. If neglected, it will result in significant expenses and a headache for your loved ones. 

• Use the three-step process to remind yourself when you need to review your estate plan. 

• You don’t need to become an expert on the intricacies of estate planning - communicate with your financial advisor and estate attorney to make your wishes a reality.

Until next time,

Travis

Investment advisory services offered through Andrews Advisory Associates LLC, a registered investment advisor. This blog is not meant to give investment advice. Before investing in any advisory product please carefully read any disclosure documents, including without limitation, the firm’s Form ADVs. The information herein is provided for informational purposes only, and does not constitute an offer, solicitation or recommendation to sell or an offer to buy securities, investment products or investment advisory services. Nothing contained herein constitutes financial, legal, tax, or other advice. These opinions may not fit your financial status, risk and return profile or preferences. Investment recommendations may change, and readers are urged to check with their investment adviser before making any investment decisions.