Estate planning might not be the easiest topic to discuss, but it is arguably one of the most important conversations you can have with your family. The reality is that many Nevadans put off estate planning, and when they do, costly mistakes follow. These are not just limited to financial errors—they can create family conflict, delay distribution of your assets, and leave your loved ones in a difficult legal position without proper care in accordance with your wishes. Let's explore common mistakes that could harm yours or your family's security and well-being.
Mistake #1: Skipping the Plan Altogether
The biggest mistake of all.
If you die without a will or trust, Nevada's intestacy laws take over. A judge decides how your assets are distributed, who becomes guardian of your minor children, and who manages your estate. You essentially hand over decision-making to the state. Nevada's one-size-fits-all approach does not account for your family's unique situation, your intentions, or your desire to protect your children.
Imagine suffering a stroke tomorrow. Who would pay your bills? Who could access your bank accounts? Who would make medical decisions on your behalf? Does that person know your medical wishes for end-of-life decisions?
Without a financial power of attorney, your family would need to go to court and petition for guardianship—a costly and public process. A power of attorney allows someone you trust to manage your finances if you become incapacitated.
You also need a healthcare power of attorney to authorize someone to make medical decisions on your behalf and to outline your health care directives to ensure your preferences are followed with respect to your own medical care.
The fix is straightforward: create an estate plan. Typically, a complete estate plan includes a revocable living trust, last will and testament, powers of attorney, and health care directives.
Mistake #2: Outdated Beneficiary Designations
After a major life event—divorce, remarriage, or the birth of a child—many people forget to update beneficiary designations on retirement accounts, life insurance policies, and transfer-on-death accounts. This is a critical oversight. Beneficiary designations override your Will or trust with respect to that specific account.
A life-changing event like divorce requires immediate action. Review all your beneficiary designations and update them to reflect your current wishes. This applies to IRAs, 401(k)s, life insurance, and any accounts with payable-on-death options.
Mistake #3: Unfunded Trusts
Many clients create a revocable living trust but never fund it—meaning they don't transfer their assets into the trust. An unfunded trust eliminates many of the primary benefits of creating the trust. If not owned by your trust or include a pay-on-death beneficiary, your assets still need to go through probate court proceedings, defeating the entire purpose of having a trust. Funding a trust means retitling your property so the trust is the owner, not you personally.
After creating your trust, work with your attorney to ensure that bank accounts, investment accounts, real estate, business interests, and other assets are properly transferred into the trust. This is an essential step.
Mistake #4: Not Updating Estate Plan Following Life Changes
An estate plan should evolve as your life changes. A good rule of thumb is to review it every 10-15 years, but certain events should trigger an immediate update.
Major life changes
- Marriage, divorce, or remarriage
- Birth or adoption of a child or grandchild
- Death or incapacity of a beneficiary, executor, or trustee
Financial changes
- Significant increase or decrease in assets
- Buying or selling a home or business
- Receiving an inheritance or large gift
Legal and tax changes
- Updates in estate or tax laws that could affect your plan
- Moving to a different state (since estate laws vary)
Changes in your wishes or relationships
- You want to add/remove beneficiaries
- You’ve changed your mind about who should make decisions for you (health care or financial power of attorney)
Health considerations
- Diagnosis of a serious illness or decline in capacity, which may require updating healthcare directives or powers of attorney
Even if none of these apply, periodic check-ins help ensure everything still reflects your intentions and current laws.
Mistake #5: Ignoring Digital Assets
In today's world, you likely have significant digital assets: email accounts, social media profiles, cryptocurrency, cloud storage, online banking, and subscription services. Many people don't address these in their estate plans. Your family may not know how to access your accounts, cancel subscriptions, or manage digital property. Worse, important documents or assets could be lost forever.
Create a list of your digital assets, usernames, and password information. Store this securely and ensure your executor or trustee knows where to find it.
Nevada's adoption of the Uniform Fiduciary Access to Digital Assets Act (RUFADAA) allows fiduciaries to manage digital assets, but you should still document your accounts.
Conclusion
Estate planning isn't something you do once and forget about. As your life changes, your plan must evolve. The mistakes outlined here are all preventable with proper guidance and action. If you haven't updated your estate plan in the last three years, or if you don't have one at all, now is the time to act. Your family is counting on you.
About the Author
Ronnie T. Goodwin leads the estate planning department with Leavitt Law Firm in Las Vegas, Nevada. To schedule a consultation or find out more information, visit www.leavittlawfirm.com.