Estate Planning Mistakes That Cost NYC Families Thousands

Estate planning involves much more than just writing a will and determining beneficiaries. If managed properly, estate planning is a way for families to secure generational wealth, provide for their loved ones, and avoid painful disputes down the road.

However, finding the most ideal solution isn’t always a clear-cut path. Many families across the state make costly missteps, usually without realizing it. These errors commonly lead to long delays, high legal fees, and unwanted stress for those left behind.

At the Law Offices of Vlad Portnoy P.C., we’ve managed thousands of estate planning cases in New York. We can tell you from first-hand experience that most estate planning mistakes can be avoided in the early stages. Understanding the risks of these mistakes (and how to avoid them) is the first step toward protecting what matters most.

An Overview of Estate Planning Law in NYC

Estate law in New York has several unique nuances.

These estate laws govern how to transfer property and financial power if someone passes away with or without a valid will. Dying “intestate” — without a will — means state law decides how assets are split. These solutions may be different from what the deceased would have chosen.

In areas like NYC, where property values are high, estate taxes and probate costs can take large bites out of inheritances. For instance, the New York State estate tax exemption in 2024 was $6.94 million: any estate above this faces significant taxation, and even moderate apartments in places like Manhattan can quickly exceed this estate tax limit.

Additionally, families caring for elderly or disabled members face added layers in the estate planning process. Rules about guardianships, Medicaid eligibility, and protecting benefits require special attention and detailed documentation.

Mistakes in the process can disqualify someone from public aid – or potentially lead to court battles over care and property.

Common Estate Planning Mistakes in New York

Even with good intentions, many New York families make critical errors that lead to lost assets and court delays. This is especially common with a large estate. In our experience, these are some of the most common mistakes we see families make:

DIY-ing Estate Planning

Trying to manage estate planning on your own might seem like a smart way to save money, but in nearly all cases, it ends up costing families far more in the long run.

Online templates and generic forms don’t account for your unique situation or New York’s specific legal requirements. Missing signatures, incorrect wording, or failing to address the state’s laws can make your documents invalid or unenforceable.

Even small errors can trigger probate or tax problems, which can be easily avoided with professional legal guidance. Your legacy – more than likely – cannot be properly managed with a one-size-fits-all online form. Attorney fees pale in comparison to the long-term consequences of mistakes in the estate planning process.

Failure to Update Documents

This is the most common mistake people make in the estate planning process. Wills get drafted originally, then never revisited. Circumstances in life can change, including marriage, divorce, birth of children, and grandchildren, etc. These changes can impact family dynamics and the beneficiaries.

Outdated wills and beneficiary forms on financial accounts may result in sending assets to unintended people or trigger disputes. Even small changes, like moving to another state, can impact how your estate documents are interpreted. Estate planning is not a one-off task – it’s one that evolves as your life changes.

It’s recommended to have regular reviews (at least annually) with an estate planning attorney to make sure your wishes are always clearly stated and legally valid. Keeping your documents updated can prevent conflict, reduce the risk of costly legal challenges, and give your loved ones peace of mind.

Not Planning for Incapacity

While a disability or medical emergency is difficult to plan for, a sudden illness can leave someone unable to manage their estate planning affairs. Fortunately, people can plan for the unexpected by appointing a power of attorney and advance directives. Without this health care power, families may be forced to seek court approval to act, which can be an expensive and slow process in New York.

This situation can delay big decisions about medical care, finances, and property management. Proactive planning protects both you and your family from undue stress during an already difficult time.

Overlooking Digital Assets

According to a survey conducted by Bryn Mawr Trust (reported on Business Wire), Americans on average hold around $190,000 in digital assets, while about 75% of people have little to no knowledge of digital estate planning.

Failing to plan for digital assets — online accounts, social media accounts, software, data, digital content, cryptocurrency wallets, etc. — can cause trouble for heirs, who may be legally locked out of these resources.

Some platforms have strict privacy policies that make accessing these accounts nearly impossible without advance authorization. This is why it’s so important to account for digital assets in your estate plan. Legal authorization dictates who can manage, close, or memorialize your accounts according to your wishes. Digital estate planning also protects against the risk of identity theft or loss of valuable digital property.

 

Common Estate Planning Mistakes Seniors and Caregivers Make

Estate planning can become very complex for seniors and people caring for incapacitated or disabled loved ones. Some of the most common mistakes we see here include:

Ignoring Medicaid planning

According to the Community Service Society of New York, around seven million state residents are enrolled in Medicaid. Mistakes in transferring or structuring assets can make someone ineligible for these critical services or trigger look-back penalties. The five-year look-back period means any improper transfers can disqualify you from receiving benefits when you need them most.

Early Medicaid planning can help protect your home, savings, retirement plans, and other assets while securing the care you deserve.

Gaps in Guardianship Arrangements

Some families assume informal agreements are enough. Without legal guardianship or powers of attorney, caregivers may find themselves unable to make medical or financial decisions if/when the time comes.

Verbal agreements hold no legal weight in New York courts. In some cases, families may be left powerless during emergency situations. Formalizing these arrangements with the appropriate legal documents gives your loved ones the authority to act on your behalf. This avoids unnecessary court proceedings and guarantees your wishes are honored.

Special Needs Trust Errors

Disabled relatives need diligent estate planning to avoid losing government benefits. Failing to set up a proper Special Needs Trust can accidentally disqualify a loved one from Supplemental Security Income (SSI) or Medicaid, and “do-it-yourself” forms can, in many cases, miss certain protections.

Special Needs Trusts are required to follow strict legal guidelines to protect eligibility for public assistance. A poorly drafted or outdated trust may result in funds being counted as personal assets, putting benefits at risk.

Working with a professional New York estate planning firm can guarantee the trust meets all requirements, protecting your loved one’s financial future and access to care.

 

How Probate Court Causes Financial Loss

According to NYCourts.gov, New York’s intestacy laws do not consider stepchildren or unmarried partners. Failing to clarify your intentions in legal documents can potentially disinherit those who might expect support. This commonly leads to family disputes and added legal bills.

Without proper planning aligned with your estate planning goals, assets may go to biological relatives or the surviving spouse instead of the people you intended to provide for. Clear, legally binding documents are extremely important to protect everyone you care about.

 

Ways to Prevent Estate Planning Mistakes

As mentioned, most of these estate planning mistakes are avoidable in the early stages with good organization and foresight. The best steps you can take to avoid problems include:

Review Your Estate Documents Periodically

We recommend updating your living will, trusts, and beneficiary forms every year or after major life changes. By doing this with your estate planning attorney, you can easily make sure your assets go where you intend. Regular updates prevent outdated language or legal gaps from causing delays or disputes down the road.

Checklist to Review Annually in Your Estate Plan

• Beneficiary Designations

Confirm that all names on your will, trusts, life insurance policy, and retirement accounts are current. 

• Powers of Attorney & Health Care Proxies

Make sure your selected agents are still the right fit and legally documented.

• Asset Inventory

Update your list of properties, bank accounts, digital assets, and investments.

• Legal & Tax Changes

Review any new state or federal laws that could impact your plan.

• Family or Life Changes

Consider marriages, divorces, births, deaths, or relocations that may affect your wishes.

 

Have an Open Line of Communication with Stakeholders

Talk with family members and caregivers about your wishes and make sure key players know where to find legal documents. Open communication is key to preventing unwelcome surprises, confusion, and conflict later.

Make it a point to set clear expectations for how trusted people can step in if something happens. Regular family check-ins can strengthen these relationships and provide peace of mind for everyone involved.

Stay Connected with Estate Planning Professionals

Laws and financial rules are always subject to change.

Staying in contact with estate planning attorneys, accountants, or financial planners can help identify risks and adjust strategies to fit changing family needs and the latest legal standards. These professionals keep you informed about state estate tax and new legal requirements. More importantly, they can recommend updates to keep your estate plan compliant and effective.

 

The Value of a New York Estate Planning Attorney

Some families choose to handle simple estates on their own. However, it’s very easy to make mistakes without a thorough understanding of estate and tax laws. Many New Yorkers can benefit from professional legal guidance — especially where high-value assets or vulnerable dependents are involved.

Adapting Plans as Your Life Changes

Significant changes happen at every stage of life, and your estate plan needs to adapt with these changes.

Major life events like marriage, divorce, business growth, and relocation can all impact your legal documents. Regular check-ins with your advisor keep your plan aligned with your goals and protect your loved ones from future complications. Legal advisors can suggest updates as your family and finances evolve, explain changes in the law, and provide estate planning tools to help reduce the chances of problems in the long run.

Addressing Multi-Generational Requirements

Many New York families support both older and younger generations, and these arrangements need to be accounted for in an estate plan.

An estate planning attorney works with you to help balance these responsibilities, including special arrangements like trusts for grandchildren, educational funds, or care for aging parents. Without diligent planning, these obligations can strain family finances and relationships. Estate planning professionals help create strategies for protecting assets while meeting immediate needs.

Managing Challenges in New York Elder Law

Medicaid planning, long-term care insurance, and public benefit preservation require careful management under New York estate law. A big part of an estate planning attorney’s job is to stay on top of these changing requirements and help protect both assets and eligibility.

Mistakes in planning can lead to disqualification from services, or in extreme cases, loss of hard-earned savings or business interests.

 

What’s the Next Step?

Creating a comprehensive estate plan can seem overwhelming, but taking clear, thoughtful steps today can save New York City families thousands — or potentially millions — in lost assets, unnecessary tax burdens, and legal expenses.

By understanding common mistakes and the special risks facing New York residents, individuals and caregivers can preserve a stable future for those they love. Whether you’re starting your first will, updating an existing plan, or caring for a vulnerable loved one, informed action is the best way to protect your legacy with peace of mind.

At the Law Offices of Vlad Portnoy P.C., we’ve spent more than two decades helping New York families manage the estate planning process and create solutions that work for everyone. 

Schedule a consultation with a professional NYC estate planning attorney today.