The Gap Between Intent and Outcome
Estate planning failures rarely result from malicious intent or negligent attorneys. They most often result from inaction - from documents that were not updated, conversations that were not had, and structures that were not revisited as circumstances changed. The families who lose the most to estate planning errors are often those who did the most planning: they have the assets, they took the initial steps, and they assumed the work was done.
The passage of the One Big Beautiful Bill Act in July 2025 has added an important new dimension to this problem. Many families who spent the past several years urgently implementing transfer tax strategies - racing against a feared exemption sunset - now find themselves holding structures that were built for a problem that no longer exists, and may not have adapted their planning to reflect the new environment. What follows are the five mistakes we encounter most frequently - and most expensively - among high-net-worth families.
Mistake 1: Outdated Beneficiary Designations
Beneficiary designations on retirement accounts, life insurance policies, and annuities are legal contracts that override everything else in your estate plan. No will, no trust, and no verbal instruction can redirect assets that pass by designation to a named beneficiary.
The result: a client who divorced fifteen years ago and never updated the designation on a $1.2 million IRA may unintentionally deliver that asset to an ex-spouse. A client who named their children directly on a retirement account before 2020 may not realize that those beneficiaries now face a ten-year mandatory distribution window under the SECURE Act - often at their peak earning-year tax rates - rather than the stretch arrangement that existed when the designation was made.
The fix is an annual review of every designated account and insurance policy, coordinated with your trust and estate plan so that the same assets do not flow to different places through different mechanisms. This is unglamorous work. It is also among the highest-value work in estate planning.
Mistake 2: Maintaining Trust Structures That No Longer Serve You
Prior to July 2025, many high-net-worth families were urgently implementing credit shelter trusts, spousal lifetime access trusts, and other irrevocable structures designed to lock in the then-temporary elevated exemption before it was scheduled to sunset. The OBBBA changed the calculus entirely. Effective January 1, 2026, the federal estate, gift, and generation-skipping transfer tax exemption is permanently set at $15 million per individual - $30 million for married couples - indexed for inflation annually. The feared cliff never arrived.
This creates a new and underappreciated problem for families who moved aggressively into irrevocable structures under the old regime. Assets transferred into irrevocable trusts during lifetime do not receive a step-up in basis at death. Assets held in a revocable estate - or retained until death - do. For a family with a combined estate well under $30 million, the estate tax savings from an irrevocable trust may now be zero, while the income tax cost of losing the basis step-up could be substantial.
Planning Note: With the $15 million exemption now permanent, federal transfer taxes are a concern for only the wealthiest families. For most clients, income tax planning - including preserving the basis step-up at death - is now the primary objective. Existing trust structures should be reviewed to ensure they are not inadvertently working against you.
The appropriate response is not to undo transfers that have already been made - that is generally not possible - but to review whether the current structure still makes sense going forward, and to ensure that future planning is calibrated to the new environment rather than the old one.
Mistake 3: Ignoring State-Level Estate Taxes
With the federal exemption now at $15 million, many families have concluded that estate tax planning is no longer relevant to them. For those residing in one of the eighteen states and jurisdictions that impose their own estate or inheritance tax, that conclusion is wrong.
State exemptions are entirely independent of federal changes. As of 2026, Massachusetts and Oregon exempt only $2 million, Washington State exempts $2.193 million, and Minnesota's exemption is $3 million, though these state thresholds are subject to change. For a client with a $10 million estate in Massachusetts, the state estate tax exposure can exceed $1 million - a number that careful planning can dramatically reduce or eliminate. Qualified Terminable Interest Property trusts, spousal planning, and jurisdiction-specific strategies can address this exposure, but only if the advisor and attorney are actively looking for it.
The shift in federal planning should not be mistaken for a signal that state-level planning no longer matters. For residents of high-tax states, it may now be the primary estate tax concern.
Mistake 4: Leaving Retirement Accounts to the Wrong Beneficiary or Structure
The post-SECURE Act environment has fundamentally changed the calculus of who should inherit retirement accounts and how. Most non-spouse beneficiaries must fully distribute inherited IRAs within ten years of the original owner's death. For a high-earning adult child inheriting a $2 million traditional IRA, that ten-year window can mean paying 37% or more in federal taxes on substantial portions of the inheritance - often at their peak earning years.
A Roth conversion by the original owner during their lifetime, though a taxable event, converts that same inheritance to ten years of tax-free distributions. Alternatively, naming a charitable remainder trust or a carefully drafted conduit trust as beneficiary can provide both tax efficiency and distribution flexibility. The key is recognizing that beneficiary structure is not a formality - it is a tax planning decision with outcomes measurable in six or seven figures.
Mistake 5: Treating the Estate Plan as Finished
The final and perhaps most pervasive mistake is treating an estate plan as a completed project rather than a living document. The OBBBA is itself the clearest recent example of why this matters: families who planned urgently around a sunset that never materialized may now hold structures optimized for a problem that no longer exists. Those who deferred planning because the exemption seemed temporary now find themselves in a more favorable and more stable environment - but may still have done no planning at all.
Tax laws change. Exemptions adjust. Family members are born, marry, divorce, develop financial vulnerabilities, or predecease. Businesses are built or sold. Real estate is acquired in new states. Each of these events has the potential to make a previously appropriate plan inadequate - sometimes significantly so. The most rigorous families treat their estate plan like their investment portfolio: subject to regular review, responsive to changing conditions, and managed with a forward-looking perspective rather than as a record of decisions already made.
Estate planning errors are rarely discovered until it is too late to correct them. The OBBBA has changed the planning landscape in meaningful ways - both creating new opportunities and rendering some prior strategies less relevant. A thorough review now is not a formality. It is a financial imperative.