Coordinated Counsel®
Be Wary of How Non-Planning Relatives Can Disrupt Your Plans
Transcript
BARRY: The last thing I added just now, in your honor, new number 18 on our top 10 is–
CHAD: You just wanted to even it out so we each had 18. I know what you were doing there.
BARRY: I forgot you had 18, that’s right. But I’m all about being fair. Fair and reasonable all the time. Call me out. But you brought it up, so it’s kind of your fault.
The big mistake that I see is where you have a family that does really good planning. Very sophisticated, very thoughtful. And then you have extended family members who don’t plan and give to your family.
And if you have situations involving substance abuse, special needs, irresponsible beneficiaries, or assets where they didn’t think about tax consequences, letting IRAs go to the estate — it just compounds the problem. You’re not coordinating well.
So be mindful of how grandparents and other family members are planning and how it impacts your plan. Because it would be horrible if grandparents gift to a special needs child and unintentionally disqualify them from benefits that you spent significant time and money protecting.
The Hidden Risk in Estate Planning: When Extended Family Plans Don’t Align
By: Barry E. Haimo, Esq.
May 14, 2026
When people think about estate planning, they usually focus on their own documents, making sure wills, trusts, and beneficiary designations perfectly match their intentions. But there’s a critical risk that often goes overlooked: what happens when other family members’ plans are not aligned with yours?
Even the most thoughtful, well-structured estate plan can be undermined by a lack of coordination with your extended family.
When Good Planning Meets No Planning
Picture this: your household invest time and resources into building a comprehensive estate plan, carefully considering tax implications, asset protection, and the specific needs of beneficiaries. At the same time, you have extended family members (such as grandparents, aunts, or uncles) with little to no planning in place. Or they may have outdated or overly simple plans that do not account for the complexities of your family’s situation.
No big deal, right? After all, your family is your family.
That’s true — right up to the point when those family members leave assets directly to your children or other beneficiaries without understanding your broader goals and intentions.
If this happens, what seems like a generous gift can create unintended consequences.
Why This Matters for Vulnerable Beneficiaries
This issue becomes especially important when a beneficiary has special circumstances. For example, a child with special needs may rely on government benefits for healthcare, housing, or daily support. And these programs often have strict financial eligibility requirements. If a well-meaning grandparent leaves money directly to that child, it could disqualify them from those benefits, undoing years of careful planning designed to protect their eligibility.
Similarly, beneficiaries who struggle with substance abuse, financial irresponsibility, or other challenges may be particularly vulnerable to receiving assets outright. A sudden inheritance can be quickly depleted or even harmful if it is not managed properly.
Tax Consequences Can Compound the Problem
Uncoordinated planning can also create unnecessary tax burdens. For example, certain assets like retirement accounts have specific tax rules. If those assets are left directly to a beneficiary without proper planning, it can accelerate tax liability and reduce the overall value of the inheritance. In some cases, assets may even be directed to an estate instead of an individual or trust, creating additional layers of complexity, cost, and delay.
Without coordination, these issues can compound, leading to outcomes that are far from what anyone intended.
How to Protect Your Plan
The key to avoiding these problems is communication and coordination.
While you cannot control every decision your extended family makes, you can take proactive steps to reduce risk:
- Inform key family members about your estate plan, especially if there are special considerations for certain beneficiaries.
- Encourage coordination by involving professionals (such as estate planning attorneys and financial advisors) who can help align strategies across generations.
- Use protective structures, like trusts, that can receive assets on behalf of beneficiaries and preserve the intended protections.
In some cases, it may even be appropriate to suggest specific language or structures that other family members can incorporate into their own plans.
Planning Beyond Your Own Documents
Estate planning is not just about what you do. It is also about how your plan interacts with the plans of others.
When families take a coordinated approach, they can protect vulnerable beneficiaries, reduce tax exposure, and ensure that assets are used in the way they were intended. Without that coordination, even the best plan can be unintentionally undone.
Not quite sure how to talk to or coordinate your plans with your extended loved ones? Set up a consultation.
And if you’re interested in getting all of your advisors on the same page, get in touch with Kinnect Financial.
