Have your beneficiary designations kept pace with your current wishes?
Is your homestead properly protected under Florida law?
Have you reviewed your documents since your last major life event?
We help clients work through these kinds of questions every day. Addressing them can save your family stress at the worst possible time.
This article will discuss some of the most common planning pitfalls we have seen frequently through the beginning of 2025. These subtle oversights may not seem urgent at first, but can lead to costly, time-consuming complications when a health crisis or death occurs.
Fortunately, if caught in time, most of these “pitfalls” can be easily resolved.
1. Outdated or Misaligned IRA Beneficiaries
One of the most frequent and impactful mistakes we see involves Individual Retirement Accounts (IRAs). Many clients assume their will or trust governs who receives these assets, but IRAs pass strictly by beneficiary designation, regardless of what is in your estate planning documents.
Not long ago, we met with a widow whose husband had passed away unexpectedly. Although they had updated their wills after a second marriage, the beneficiary designation on his IRA, worth over $1.2 million, still named his first wife. Florida law offered no remedy. As a result, his current spouse received nothing from that asset.
IRA custodians will follow the beneficiary designation on file, regardless of what your will says. That’s why we encourage clients to review these designations regularly, especially after life changes like marriage, divorce, birth, or death.
Additionally, beneficiary decisions should be made with tax implications in mind. Under the SECURE Act, most non-spouse beneficiaries must withdraw the entire inherited IRA within ten years. This can result in significant tax consequences. In higher-net-worth planning, we often incorporate trusts with specific provisions for IRAs to create both flexibility and tax efficiency.
2. Joint Accounts Aren’t Always Equal
Florida offers married couples a special form of joint ownership called tenancy by the entireties (TBE), which provides strong protection from creditors. Unfortunately, many financial institutions default to joint tenants with right of survivorship (JTROS), which lacks those same safeguards.
Many clients unknowingly hold significant joint accounts in JTROS. In those cases, personal liability exposure extends to accounts held by a spouse. This can be avoided with TBE ownership.
TBE in Florida provides:
- Protection from creditors of only one spouse
- Automatic right of survivorship
- A requirement that both spouses consent before severing the ownership
When opening or reviewing accounts with your spouse, it is important to clearly request TBE ownership and confirm the title designation with your financial institution. We often work alongside financial advisors to ensure titling aligns with asset protection goals.
3. Transfer on Death Designations Can Undermine Your Trust
Transfer on Death (TOD) designations are commonly used to avoid probate, but they can directly conflict with your estate plan’s intent, especially in families with trusts or special considerations.
Directing assets by TOD instead of through a properly structured trust can undermine special needs planning. If a beneficiary with disabilities receives an inheritance outright—rather than through a trust designed to preserve government benefit eligibility—it can unintentionally disqualify them from essential support services.
TOD designations can:
- Bypass your trust provisions entirely
- Expose assets to beneficiaries’ creditors or divorces
- Create uneven inheritances against your wishes
- Disqualify special needs beneficiaries from critical services
In many cases, these issues can be avoided by retitling any brokerage and investment accounts into your revocable trust. This keeps your assets aligned with your estate plan while still avoiding probate in most circumstances.
4. After Major Life Changes, Your Plan Needs a Check-Up
Estate planning documents are not “set it and forget it.” Even a well-drafted plan requires review as life unfolds.
As we’ve seen with the previous pitfalls, significant assets can unintentionally pass to an ex-spouse or bypass intended heirs entirely.
In Florida, beneficiary designations on assets like life insurance and retirement accounts take precedence over your will or trust. They are also not automatically revoked after divorce.
It is critical to review your estate plan after:
- Marriage or divorce
- Birth or adoption of children or grandchildren
- Death of a beneficiary or fiduciary
- Large changes in asset value
- Moving to Florida from another state
- Changes in tax law
While this is a good starting list, we recommend reviewing your estate plan every three to five years. This helps ensure your plan remains aligned with your current wishes and with the changing law.
5. Adding Family to Your Deed May Do More Harm Than Good
Florida’s homestead protection laws offer valuable tax and creditor protections. However, these benefits can be lost through well-intentioned but improper planning.
Many clients assume that adding a child or others to their homestead property deed will be a future transfer. This misstep could lead to big consequences. In one case, a retired teacher added her daughter to her deed, but she was unaware that it could:
- Trigger a taxable gift
- Expose the home to her daughter’s creditors
- Complicate her homestead tax exemption
- Alter the cost basis, increasing capital gains liability later
Fortunately, because it was caught in time, she was able to take advantage of Florida’s homestead benefits while still planning for future transfer, which includes:
- Enhanced life estate deeds (Lady Bird deeds)
- A properly structured revocable trust
- Letting the homestead pass through Florida’s probate system, which can be efficient and protective when done correctly
6. Tax-Free Help with Medical and Education Costs
For families with estates approaching the federal estate tax threshold ($13.99 million for individuals or $27.98 million for married couples in 2025), there are valuable ways to transfer wealth that many overlook.
One such strategy is direct payment for medical and educational expenses. When made properly, these gifts do not count against your annual exclusion or lifetime exemption when made properly.
We work with many multi-generational families in Naples who use this strategy to pay for:
- Private school tuition
- College or graduate school
- Medical care and health insurance premiums
When payments are made directly to the institution and not to the individual, they are excluded from gift tax entirely. This is one of the most simple yet overlooked planning tools for clients looking to reduce their estate and support family members in a meaningful way.
So, What Can You Do To Avoid These Challenges and Others?
Things change. Your financial situation, family dynamics, business interests, and even the laws themselves rarely stay the same for long. On top of that, Florida has unique rules surrounding homestead property, probate, and asset protection, and those rules can shift over time. A thoughtful estate plan should be dynamic, adapting to your life changes.
We like to think of an estate plan as an evolution. The most effective plans keep pace with your life and your legacy goals. Whether it’s the issues outlined here or others that surface during a thorough review, periodic evaluations often prevent unnecessary stress, expense, and unintended outcomes down the road.
A thoughtful review now can prevent confusion, conflict, or unintended outcomes later.