How to Avoid the Pitfalls of Estate Planning and Probate

Thursday, February 26, 2026

Estate planning and probate are often approached with good intentions, yet even well-meaning plans can fall short if critical details are overlooked. Laws change, family circumstances evolve, and assets shift over time which allow for gaps to develop that can create unnecessary costs and stress for loved ones. Below are some of the most common estate planning pitfalls and why addressing them proactively can make a meaningful difference in protecting your legacy.

PITFALL #5: Not Having an Estate Plan at All

If you don’t have an estate plan in place, South Carolina law will step in and make those decisions for you. While that may sound helpful, the default rules often don’t reflect your wishes and can lead to higher costs for your family. Without a Will, your assets are distributed according to state intestacy laws:

Married with no children: all to spouse
Married with children: one-half to spouse and one-half to children
Single with children only: all to children
Single with no children: all to parents
- if no parents then all to siblings
- if no siblings then all to nieces and nephews
- if no nieces and nephews then all to grandparents
- if no grandparents then all to aunts and uncles
- if no aunts and uncles then all to cousins

A solid estate plan is built on a few essential documents that work together to protect you during your lifetime and carry out your wishes after death. These documents address everything from medical and financial decision-making to asset distribution and privacy. These are the basic documents everyone should have in place:

Will
Durable Financial Power of Attorney
Durable Health Care Power of Attorney
Living Will (Declaration of Natural Death)
Revocable Trust for privacy and avoiding probate and extending distributions
HIPAA Authorization
Power to Access to Safe Deposit Box

PITFALL #4: Having an old Estate Plan and never looking back

Beneficiary designations are one of the most commonly overlooked parts of an estate plan. These designations control how certain assets transfer at death and can override your Will if they are outdated or incomplete. Estate plans should be reviewed whenever a major life change occurs, as these events can quickly make an existing plan outdated or ineffective.

This includes events such as:

Retirement
Moving to a new state
Acquiring or disposing of significant assets
Birth of children or grandchildren
Death or incapacity of family members or anyone named in your documents
Divorce
Changes in probate or tax laws
Changes in health for you, your spouse, your children, or anyone named in your documents

PITFALL #3: Not titling assets properly to make the Estate Plan work

Even the most carefully drafted estate plan can fall apart if assets are not titled correctly. A Will only controls assets that pass through probate which means failing to review ownership or properly fund trusts can result in delays, added costs, and unwanted outcomes. Understanding which assets are controlled by your Will, and which are not, is key to making your estate plan work as intended.

Examples of Probate Assets include:

Real estate titled solely in the Decedent’s name or titled as Tenants in Common
- A common misconception in SC: we do not recognize Tenancy by the Entirety – which in other states is an automatic transfer at death between husbands and wives owning real estate together
Stocks or brokerage accounts solely in the Decedent’s name or titled as Tenants in Common with no right of survivorship
Cash accounts solely in the Decedent’s name (most joint accounts are with right of survivorship)
Insurance or annuities payable to the Estate with no beneficiary
Personal effects (i.e. cars or boats) in the Decedent’s name with no Transfer on Death (TOD) designation to a beneficiary or joint owner

Assets structured to transfer automatically at death bypass the Will entirely, which can be beneficial when coordinated properly. However, these non-probate transfers can be problematic if overlooked or inconsistent with the overall plan.

To establish Non-Probate Transfers:

Title property as “joint tenancy with right of survivorship”
Pass property by operation of law with beneficiary designations (such as life insurance, IRAs, pension plan benefits)
Create payable-on-death (POD) accounts at banks or transfer-on-death (TOD) with brokerage
Transfer property by deed with right of survivorship
Establish living trusts (property in a living trust is non-probate) and fund it – executing the document only does not help avoid probate
- Note: A Living Trust does not avoid estate taxes
Vehicles and boats may now have TOD designation

Use of “Joint with Right of Survivorship” to Avoid Probate

Beware of overloading the spouse’s estate and not funding a marital trust or a unified credit shelter trust – you can no longer control the disposition of the asset after death if it is an outright disposition (i.e. second spouse pitfalls)
Beware of unequal distributions among children at death
Beware of adding children that live close by to bank accounts “for convenience” – by operation of law the child will conveniently get the remainder of the account and to share the account may cause gift tax problems

Using a Living Trust to Avoid Probate

Privacy – trusts are not filed at the Probate Court
Continuity of asset management – successor trustee will take over management of assets with no downtime for Probate Court appointment
Avoiding probate in multiple jurisdictions if you own property in more than one state or more than one county
You must fund the trust with all potential probate assets to avoid probate completely
You must title assets in the name of the trust – seek help from a lawyer

PITFALL #2: Forgetting to Update Beneficiary Designations or Failing to Name Contingent Beneficiaries or Naming Inappropriate Beneficiaries such as Minors or Disabled Beneficiaries

Beneficiary designations should be reviewed regularly, especially when insurance companies change as outdated records are more common than many people realize. As part of that review, it’s important to request written confirmation of your primary and contingent beneficiary designations on a regular basis. Divorce or separation is an especially critical time to revisit these designations, taking into account the specific terms. When beneficiary updates are overlooked, ex-spouses can unintentionally receive life insurance or retirement benefits tied to forgotten accounts.

Naming a minor or disabled individual as a direct beneficiary of insurance policies, 401(k)s, IRAs, or pension plans can create serious complications. If proceeds exceed $25,000, a conservatorship may be required, and government benefits for disabled beneficiaries could be disrupted or lost entirely.

These outcomes are often avoidable with proper planning:

Create a fiduciary duty for the guardian of a child as the trustee and not give the funds outright to the guardian
Set up a trust for the benefit of the minor or set up a special needs trust for the benefit of disabled beneficiaries
Charitable bequests – consider naming a charity as a partial beneficiary of an IRA or 401(k) – the charity pays no income tax on this bequest and the Decedent’s estate pays no estate taxes

PITFALL #1: Not taking advantage of all the tools to reduce Estate Taxes

Estate taxes can significantly reduce the value of what you leave behind if they are not addressed intentionally as part of your overall plan. While current laws may reduce exposure for some families, overlooking available strategies can still result in unnecessary tax burdens and missed opportunities. Understanding how estate taxes and gift strategies work together is essential to building a tax-efficient estate plan.

Estate Taxes

Due nine months from the date of death
Paid by the estate and ultimately your heirs
- Your documents can outline who must pay and in what proportions
- If not addressed, then pro-rata
Life insurance is a source of payment for estate taxes if your estate is not liquid
Charities and spouses do not pay estate taxes on bequests which create opportunities for future tax savings
- Be careful choosing assets to fund these charitable and marital bequests

Gift Taxes

Annual exclusion of $19,000 per recipient, married couples can give up to $38,000 per recipient
Payments directly to medical providers and educational institutions are excluded from the annual limit
Gifts within these limits are gift tax free and estate tax free