Estate Planning: Five Mistakes to Avoid

For high-net-worth families, estate planning is an essential part of a comprehensive wealth strategy. An effective estate plan can help preserve assets, minimize taxes where appropriate, and reduce the potential for family disruptions. On the other hand, an ineffective one risks eroding family wealth and fostering conflicts.

Estate planning mistakes are common, but many of them are also preventable. With preparation and coordination, families can help ensure that their plan holds up when it matters most. Below, we discuss five mistakes that can undermine a family’s estate plan, and how a thoughtful approach can help avoid them.

Mistake #1: Treating estate planning as a one-time process

Many families have an estate plan in place. Whether that plan actually reflects their current circumstances is a separate question.


Estate planning isn’t a one-time event. Instead, it’s an ongoing process that needs to adapt as circumstances change. Changes that might trigger an estate plan review include:

• Shifting tax rates or revised exemption amounts.
• Family transitions, such as new children or new marriages.
• Launching a business or selling an existing one.
• Market appreciation making a once-modest estate newly taxable.
• Shifting personal goals and values as life evolves.

Just because you have a plan in place doesn’t mean it’s the right plan for the present moment. Some of the most successful estate plans are the result of an ongoing process, being reviewed regularly and updated when necessary.

Mistake #2: Prioritizing wealth transfer over personal security

One of the most effective ways to reduce the size of a taxable estate is transferring wealth over the course of your lifetime. For example, annual gifts up to the exclusion limit ($19,000 per recipient in 2026) can move meaningful sums out of your estate. Before making large gifts, however, it’s important to understand the consequences of doing so.

Without proper planning, transferring wealth can risk jeopardizing your own finances. That’s especially true if circumstances change later in life (for example, due to higher-than-expected medical costs). Transferring assets today means you lose out on future income or appreciation, reducing your own retirement flexibility.

Generosity is admirable, and lifetime gifting can be an important part of a well-constructed estate plan. But generosity shouldn’t come at the expense of financial security. Instead, transfers should be made as part of a deliberate framework that includes disciplined income projections.

Mistake #3: Ignoring state-level estate taxes

Following the passage of the One Big Beautiful Bill Act, the federal estate tax exemption is now set at $15 million (or $30 million for married couples). In addition, future increases will be automatically tied to inflation. But while fewer families now face federal estate taxes, state-level taxes can still apply.

A dozen states assess their own estate taxes, including Connecticut and New York.^[1] Moreover, states like New Jersey have an inheritance tax, which is paid by the heirs who receive the assets. As a result, planning that only accounts for federal exposure can leave meaningful tax liabilities unaddressed.

Strategies to manage state-level liabilities are similar to those used at the federal level, including lifetime gifting and the effective use of trusts. In some cases, families may even consider changing their state of residence, especially if they’re already weighing a move for other reasons.

Mistake #4: Underestimating liquidity needs

It’s common for high-net-worth estates to be asset-rich but cash-poor. Families may have concentrated wealth in private businesses or illiquid real estate that overshadows holdings of cash or marketable securities. During generational transitions, a lack of liquid assets can force families to make unpleasant decisions.

After a death in the family, liquidity needs often jump, whether due to tax obligations or inheritance distributions. Without proper preparation, families may be forced to sell assets at distressed prices or borrow at unfavorable terms. Liquidity planning can help avoid that crunch, with potential strategies including:

• Purchasing Life Insurance – Life insurance pays out a tax-free death benefit precisely when the estate needs cash.
• Establishing Credit Facilities – Ensuring access to credit can allow families to borrow against existing assets at predictable terms.
• Building Cash Reserves – A family’s investment portfolio can hold a deliberate allocation to cash and short-term instruments for estate transition purposes.

In practice, wealthy families may combine these strategies to establish proper liquidity coverage. Ensuring that cash is available when a family needs it most helps prevent forced decisions that can spark conflict and erode wealth.

Mistake #5: Failing to plan for family dynamics

Even a carefully structured estate plan can fail if it doesn’t account for the people it’s meant to serve. For example, ambiguous intentions risk triggering family conflicts that last for years. Without a clearly articulated plan, unequal inheritances, an omitted relative, or a disputed role in a family business can all become a source of tension.

Avoiding these scenarios takes clear documentation and established governance. In addition to communicating your intentions early, that also means clarifying who has the authority to make decisions after you pass. Governance frameworks can even include ongoing meetings to ensure family members are aligned.

In many cases, navigating family dynamics – which often requires emotionally honest conversations – can be the hardest part of estate planning. But addressing these dynamics proactively is what helps increase the likelihood of a technically sound plan is carried out by the people it impacts most.

A Coordinated Approach

An estate plan touches almost every aspect of a family’s financial life, including taxes, liquidity, and investments. It’s also an intensely personal exercise, with the potential to help affirm – or disrupt – some of a family’s most important relationships. As a result, diligent planning is essential, since even small mistakes can have high costs.

The families who avoid those mistakes are rarely the ones with the most sophisticated structures. Instead, they’re the ones who understand that estate planning is an ongoing process, with each decision considered in the context of a broader wealth strategy. If you have questions about how estate planning fits into your financial picture, we invite you to reach out to our team to start the conversation.

^[1] Tax Foundation, Estate and Inheritance Taxes by State, 2025

Coastal Bridge Advisors, LLC is an SEC registered investment advisor. SEC registration does not constitute an endorsement of Coastal Bridge Advisors by the SEC nor does it indicate that the firm has attained a particular level of skill or ability. The information contained herein is provided for educational purposes only and should not be construed as tax, legal, or investment advice. You should consult your own qualified tax advisor, CPA, or attorney before making any decisions with tax or legal implications. Estate planning strategies should be evaluated based on your individual circumstances in consultation with your legal, tax, and financial advisors. There is no assurance that any estate planning strategy will achieve its intended objectives or that future legislative or tax changes will not affect the effectiveness of such strategies. Federal and state tax laws are subject to change, and their application depends on individual circumstances. Information obtained from third-party sources is believed to be reliable but has not been independently verified. CBA makes no representation as to its accuracy or completeness. For information regarding the firm, please visit www.coastalbridgeadvisors.com or email info@coastalbridgeadvisors.com.