Estate planning can get complicated quickly.
We’ve been mentoring estate planning lawyers in the weekly hot seats for The TT Precedents Club since 2021, and it’s been so insightful understanding the practical challenges you face drafting wills and devising client strategies on the daily.
I truly love being part of a community where we can learn from each other!
Now for the not-so-fun part.
We’ve also seen plenty of estate plans go awry, despite best intentions.
Misinterpretations, planning oversights, not having time to catch up on changes to the law – we’ve all been there!
To help you avoid common pitfalls, I’ve created a list of 25 estate planning mistakes, reflecting the lessons we’ve learned in the TT Precedents Club:
1. Dealing with family trust succession in the Will instead of a separate deed of succession
2. Overlooking providing a comprehensive letter of wishes template to address the practical and relationship succession issues
3. Not stress testing and working through the practicalities of the estate distribution e.g. flow of funds, funding shortfalls
4. Forgetting to develop a suitable strategy for the family home
5. Failing to recommend a power of attorney for trading entities
6. Unclear ‘gift over’ drafting where there are multiple gift recipients e.g. do they all need to fail to survive, or does the giftover apply if one recipient fails to survive?
7. Failing to specify who is responsible for any FIRB approval fees and what happens to the gift if the FIRB approval is not granted
8. Failing to include specific powers relating to ownership and access rights over digital assets
9. Forgetting to give comprehensive instructions for the financial controllers in relation to accessing financial and digital assets, including cryptocurrencies
10. Ignoring foreign person surcharge rules for stamp duty and land tax
11. Failing to include a specific right to occupy clause where a main residence is being passed to a testamentary trust in order to access land tax concessions
12. Failing to override the 30 day survivorship rule where the estate passes to the surviving spouse in the first instance and one or more testamentary trusts in the second instance
13. Recommending testamentary trusts only for complex situations or high net wealth individuals
14. Overlooking the advantages of utilising a testamentary trust on the death of the first spouse
15. Nominating a sole trustee of a testamentary trust to manage the trust for minor beneficiaries where that sole trustee is also a beneficiary
16. Assuming the will can gift assets held in trusts and companies
17. Including in-laws as guardians of minor children to act jointly with blood relatives
18. Failing to give sufficient consideration to whether multiple beneficiaries should share their inheritance through a joint testamentary trust or in a separate testamentary trust each
19. Failing to nominate sufficient successors or ‘back ups’ to key roles such as executors, trustees, attorneys and guardians of minor children
20. Defaulting binding death benefit nominations to the surviving spouse without considering the entire estate planning strategy
21. Overlooking external documents which could impact on the will e.g. family law financial agreements, call options, shareholders agreements, partnership agreements or insurance funded buy sell deeds
22. Waiting to complete a comprehensive estate plan until after marriage or a divorce is finalised
23. Failing to equalise outstanding loan accounts between children
24. Ignoring assets held overseas
25. Failing to consider appointing a corporate trustee for testamentary trusts in New South Wales
Did any of these surprise you?