12 Estate Planning Mistakes in California

Family Unity Through Estate Planning in California

Estate planning in California is crucial to avoid common pitfalls that can undermine your objectives. This guide highlights 12 key mistakes to steer clear of, ensuring your estate is managed according to your wishes and your family's future is secure.

December 7, 2023

With rising costs of probate and complex processes involved in estate administration after one’s passing, proper estate planning is more critical than ever for Californians. However, nearly 60% of Americans do not have even basic estate planning documentation in place.

When creating or upgrading your California estate plan, avoiding common mistakes that could undermine your core objectives is vital. This guide outlines the 12 fundamental estate planning errors to steer clear of as a California resident.

1. Not Having a Will

Mind map highlighting key points about the importance of having a will in California.

Key considerations for creating a will in California.

    • Dying Intestate: Without a will, California intestacy laws dictate how assets transfer, which may conflict with your wishes.
    • Loss of Control: The court appoints administrators without your selection input, risking improper asset distribution.
    • Higher Taxes & Fees: Probate and unnecessary estate taxes can consume up to 15% more of your wealth without planning.


    • Michelle died without a will. Her assets transferred to relatives she was estranged from instead of her partner as she wished.
    • John’s estate incurred over $250,000 in unnecessary probate fees and taxes without planning.

How to Avoid:

    • Engage an estate planning attorney to prepare a customized will outlining your wishes.
    • Review and update your will every 2-3 years and after major life events.

Frequently Asked Questions:

    • Is a basic will sufficient estate planning? No, additional documents like trusts are also critical for robust asset protection.
    • What key details does my will need to include? Executor appointment, guardian specification, property distribution list, and residuary clause.

2. Not Funding Trusts

Mind map detailing the necessity of funding trusts in estate planning.

Understanding the critical role of funding trusts in California.

    • Untapped Potential: Creating trusts without transferring assets into them renders them useless.
    • Court Intervention: Trust benefits like avoiding probate and reduced estate taxes will be lost without trust funding.
    • Asset Safety: Titling assets solely in your name leaves them exposed to creditors and predators.


    • James created a trust but did not retitle any assets, losing over $250,000 in probate fees.
    • Dana faced estate taxes on stocks left in her personal name that should have been protected in her trust.

How to Avoid:

    • Work with an attorney to legally transfer assets like homes, accounts, investments into your trust.
    • Obtain appraisals for physical assets to optimize allocation and deductions.

Frequently Asked Questions:

    • What assets should I put in my trust? Usually high value accounts, real estate, etc. exceeding exemption limits.
    • Does all my wealth need to go into trust? No, personal assets within estate tax exemption limits can remain in your name if preferred.

3. Not Naming Guardians

Not Naming Guardians

The importance of selecting guardians for minors.

    • Court Appointment: Failing to select guardians for minor children risks assignment by the probate court against preferences.
    • Contested Guardianships: Family disputes over custody often ensue causing emotional and financial distress if unclear.
    • Kids Best Interests: Without guidance, the court has no way to determine what environment you deem ideal for raising your children.


    • Mark’s children went into the foster system temporarily before distant relatives were granted custody.
    • The Robinsons spent over $60,000 fighting in court for guardianship rights over a niece after her parents died.

How to Avoid:

    • Formally nominate guardians in your will after discussing with proposed caregivers.
    • Name backups to assume responsibility if the first choice is unable to take custody.
    • Review selections whenever life changes occur within potential guardian families.

Frequently Asked Questions:

    • Can I name joint or multiple guardians? Yes, you can nominate more than one person or couple to share responsibilities.
    • How specific should guardianship guidelines be? Be moderately specific on aspects like religion, schooling, lifestyles, financial support etc.

4. Forgetting Online Assets

Mind map focusing on the risks of overlooking online assets in estate plans.

The significance of including online assets in estate plans.

    • Lost in Cyberspace: Failure to outline distribution of digital assets risks losing them or unnecessary legal hurdles accessing them.
    • Estate Headaches: Without authorized access, executing your estate can become vastly more complicated.
    • Heirs Left Out: Online assets like photos, videos, social media, loyalty rewards etc. may never reach your intended recipients.


    • Susan’s children struggled obtaining her digital records across various online platforms due to lack of formal consent.
    • Ahmed’s nephews never received his accumulated airline miles, online photographs and videos without specific instructions.

How to Avoid:

    • Document all online accounts with logins and distribution guidelines.
    • Provide legally authorized access to digital executors through online platforms.
    • Review asset lists annually for additions, closures or access changes on accounts.

Frequently Asked Questions:

    • Can I give someone legal authority over digital assets? Yes, online platforms provide options to designate “digital executors”.
    • What common digital assets need distribution guidance? Email, social media, photos, loyalty programs, software licenses, online storage etc.

5. Underestimating Estate Costs

Mind map showing the impact of underestimating costs in estate planning.

Navigating financial challenges in estate planning.

    • Cash Crunch: End-of-life health expenses combined with funeral costs and estate administration fees add up swiftly.
    • Asset Liquidity: Without planning, funds may get tied up in assets that heirs struggle to access when cash is needed urgently.
    • Family Hardship: Forcing loved ones to cover substantial final expenses due to underestimation can cause financial distress.


    • The Hayes family struggled with Jim’s $85,000 medical bills and probate fees after improper planning.
    • Mary’s heir could not access her home equity in time to cover funeral costs without court orders.

How to Avoid:

    • Evaluate projected end-of-life medical bills based on health, age, assets etc.
    • Account for estate administration costs like funeral expenses, appraisals, legal

How to Avoid:

    • Evaluate projected end-of-life medical bills based on health, age, assets etc.
    • Account for estate administration costs like funeral expenses, appraisals, legal fees, taxes.
    • Allocate sufficient liquid assets accessible to executors and heirs to address urgent needs.

Frequently Asked Questions:

    • How much can I expect end-of-life healthcare to cost? Estimates range from $50,000 for simple illness to over $150,000 for complex treatments.
    • What assets can provide readily accessible funds if needed? Cash, checking accounts, money market holdings, and certain fixed income products.

6. Mixing Estate & Retirement Accounts

Mind map outlining the risks of mixing estate and retirement accounts in California.

Understanding the complexities of estate and retirement accounts.

    • Asset Erosion: Naming estate planning vehicles like trusts as retirement account beneficiaries can undermine tax advantages.
    • Double Taxation: Upon death, distributions from retirement plans to a trust or estate trigger income taxes followed by estate taxes.
    • Supplemental Planning: Strategies like disclaimer trusts help avoid accelerated taxation when coordinating accounts.


    • Steve’s $2 million IRA was taxed over 50% by naming his estate trustee as beneficiary instead of directly to heirs.
    • Transfers from Joan’s 401(k) to her trust caused over $300,000 in excessive taxation.

How to Avoid:

    • Name individual heirs directly on retirement account beneficiary forms instead of estate vehicles.
    • Leverage disclaimer DIY estate planning to enable trusts as beneficiaries while deferring taxes.

Frequently Asked Questions:

    • Can retirement accounts be coordinated with my trust? Yes, using sophisticated disclaimer trust planning strategies.
    • What accounts are deemed retirement accounts? IRAs, 401(k)s, 403(b)s, pensions, profit sharing plans etc.

7. Not Updating Beneficiaries

Mind map emphasizing the importance of updating beneficiaries in estate plans in California.

The critical need for current beneficiary designations.

    • Outdated Distributions: Forgetting to update beneficiaries after major life events risks assets going to unintended recipients.
    • Ex-Spouses: Remaining beneficiary payouts to divorced spouses can trigger disputes with current partners.
    • Annual Reviews: Best practice is reevaluating beneficiary designations yearly as relationships and priorities evolve.


    • Mark updated his will after remarriage but not his life insurance, resulting in disputes.
    • Dana’s ex-husband received proceeds from her retirement account years after divorcing.

How to Avoid:

    • When life changes happen, immediately update applicable beneficiary forms.
    • Compare beneficiary election across various accounts annually for consistency.

Frequently Asked Questions:

    • What are top events that trigger beneficiary changes? Deaths, marriages, births, divorces, newly diagnosed conditions etc.
    • Can I assign secondary beneficiaries? Yes, designating contingent beneficiaries is highly advised.

8. Poor Asset Documentation

Mind map detailing the consequences of poor asset documentation in estate planning.

Ensuring thorough asset documentation in estate plans.

    • Missing Items: Failing to catalog personal property assets and location makes it extremely difficult for heirs to take inventory.
    • Challenging Administration: Lack of clear paperwork trails, asset evidence etc. introduces delays authenticating estate holdings.
    • Lost Wealth: Without diligent documentation heirs stand to overlook assets leading to lost value.


    • The executor took months tallying Bob’s personal possessions referenced vaguely in paperwork.
    • Emma’s heir almost overlooked an antique car without updated logs of asset holdings.

How to Avoid:

    • Inventory all major personal property items with descriptions, identifiers and location details.
    • Update catalog of physical assets at least annually as items are liquidated, donated etc.

Frequently Asked Questions:

    • What assets warrant documenting beyond financial holdings? Art, antiques, jewelry, collectibles, vehicles, intellectual property etc.
    • Where should I store asset inventories? With core estate planning documents in secure online platforms and physical copies.

9. Disorganization & Clutter

Mind map showing the impact of disorganization and clutter in estate planning.

The need for organized estate planning documents.

    • Frustrated Heirs: Leaving behind disorganized records risks heirs becoming overwhelmed, delaying administration.
    • Resources Consumed: Deducting time and money to sort through clutter diminishes the value heirs ultimately receive.
    • Asset Security: Piles of sensitive financial and legal paperwork pose risks of identity theft if misplaced casually.


    • The Jackson family spent months piecing together Lily’s disordered financial records delaying distributions.
    • Michael’s sloppy recordkeeping forced his Executors to pay $8,000 to professional organizers and accountants.

How to Avoid:

    • Sort and label financial statements, legal forms, asset ownership records systematically.
    • Designate someone to assist with document organization in declining health scenarios.

Frequently Asked Questions:

    • What are the risks of poor organization beyond delays? Lost assets, beneficiary frustration, financial exploitation vulnerability.
    • Should I shred unneeded records containing PII? Yes, have old tax forms, bank statements, etc. professionally destroyed.

10. DIY Estate Planning

Mind map highlighting the pitfalls of DIY estate planning in California.

Understanding the risks of self-managed estate planning.

    • Inadequate Expertise: Attempting estate planning without legal professionals risks unanticipated complications.
    • Invalid Documents: Self-drafted documents often fail standing up to legal scrutiny after death.
    • State Law Nuances: There are complex state-specific estate planning regulations beyond generic templates.


    • John’s homemade will was ruled partially invalid, delaying asset transfers by months.
    • Megan’s online estate documents lacked critical CA probate avoidance provisions.

How to Avoid:

    • Work with a specialized estate planning attorney on customized legal documents.
    • Thoroughly examine any premade estate planning templates before relying on them.

Frequently Asked Questions:

    • Can I use software to write estate planning documents? Exercise extreme caution as gaps can cause complications.
    • What DIY resources should be avoided completely? Anything not customized by estate planning legal professionals.

11. Improper Document Storage

Mind map showing the risks of improper document storage in estate planning in California.

The necessity of proper document storage for estate plans.

    • Unavailable When Needed: Inadequately storing estate planning documents can prevent access after incapacity or death.
    • Asset Security: Originals left casually around the home risk theft, damage, or loss.
    • Online Backups: Storing scans securely online provides redundancy allowing remote access when required.


    • Michelle’s heirs struggled to locate her original will and trust documents after she passed.
    • James’ physical estate plan was destroyed in a home fire with no other copies.

How to Avoid:

    • Keep originals in fireproof safes, safe deposit boxes, or with your attorney/trustee.
    • Store digital copies on secure cloud platforms accessible to executors when needed.

Frequently Asked Questions:

    • What scenarios require accessing original estate documents? Probating a will, amending trusts, claiming life insurance, etc.
    • Where should extra copies be kept? With your attorney, financial advisor, trustee, executor and in secure online platforms.

12. Failing to Preplan Your Own Funeral

Mind map outlining the importance of preplanning your own funeral in estate planning in California.

Addressing funeral arrangements in estate plans.

    • Family Guesswork: Not specifying funeral and memorial service preferences leaves loved ones guessing.
    • Higher Expenses: Prearranging funeral specifics often results in cost savings over at-need pricing.
    • Peace of Mind: Settling details provides comfort that end-of-life events align with your exact wishes.


    • The Singh family agonized over funeral specifics for their mother without guidance on her preferences.
    • Steven’s heirs spent 30% more on services by not prearranging details before his death.

How to Avoid:

    • Document funeral specifications to share with family and selected funeral home.
    • Prepay portions of services and merchandise to ease financial burden for heirs.


While easy to overlook, avoiding these common estate planning mistakes can greatly ease administration for heirs, prevent family disputes, reduce tax liabilities by up to 30%, and ensure your final wishes get honored properly.

Leveraging professional legal resources is vital for creating an airtight estate plan that withstands legal scrutiny.

Staying organized, communicating plans clearly and reviewing documents regularly also sets up your heirs for smooth success implementing your legacy wishes.

Estate Planning Errors Quiz

    • Q1: Not funding assets into your Living Trust will result in: A) Higher taxes & fees B) No probate avoidance C) More heir disputes
    • Q2: Naming a Trust as retirement account beneficiary triggers: A) Accelerated taxes B) Loss of control C) Asset freezes
    • Q3: Hiding estate assets from beneficiaries: A) Is perfectly legal B) Carries serious penalties C) Can be difficult to prove
    • Q4: Failing to name guardians for minor children risks: A) Court assignment B) Family disputes C) Higher caregiver costs
    • Q5: DIY estate planning often results in: A) Faster document creation B) Invalid documents C) Tax optimization
    • Q6: Not designating digital asset access risks: A) Identity theft B) Lost online assets C) Technological barriers
    • Q7: Improper estate plan document storage risks: A) Fire destruction B) Legal inaccessibility C) Mold damage
    • Q8: Failing to update beneficiaries after major life events can: A) Accelerate probate B) Allow ex-spouses C) Increase taxes
    • Q9: Co-mingling estate documents with clutter creates: A) Organization B) Confusion C) Security
    • Q10: Inadequate estate cost analysis risks: A) Affordability B) Family disputes C) Burdensome expenses
    • Q11: Not prepaying funeral costs risks: A) Expense overages B) Estate depletion C) Inheritance disputes
    • Q12: Attempting estate planning without an attorney: A) Saves costs B) Meets legal standards C) Causes complications
    • Q13: Disorganized personal records can lead executors to: A) Windfalls B) Penalties C) Struggles
    • Q14: Failing to assess tax implications leaves heirs facing: A) Interest charges B) Levies C) Bill shock
    • Q15: Not sharing funeral preferences with heirs causes: A) Family friction B) Excess expenses C) Service confusion
    • Q16: Unclear estate asset documentation risks: A) Negligent executors B) Undervalued property C) Missed inheritance
    • Q17: Ambiguous wills and trusts often: A) Expedite probate B) Trigger court intervention C) Lower estate taxes
    • Q18: Ignoring state law intricacies can render: A) Agreements valid B) Heir rights protected C) Documents defective
    • Q19: Failing to properly store original estate documents risks: A) Damage B) Losses C) Inaccessibility
    • Q20: Not gifting assets before death can cause: A) Higher taxation B) Probate delays C) Family quarrels

A1: B) No probate avoidance A2: A) Accelerated taxes A3: B) Carries serious penalties A4: A) Court assignment A5: B) Invalid documents A6: B) Lost online assets A7: C) Legal inaccessibility A8: B) Allow ex-spouses A9: B) Confusion A10: C) Burdensome expenses A11: A) Expense overages A12: C) Causes complications A13: C) Struggles A14: C) Bill shock A15: A) Family friction A16: C) Missed inheritance A17: B) Trigger court intervention A18: C) Documents defective A19: C) Inaccessibility A20: A) Higher taxation

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This guide presents general information only. Consult an attorney licensed in your state for advice on your specific situation.

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