The $1.5 million estate planning mistake you can't afford to make

2025.08.29

The $1.5 Million Estate Planning Mistake You Can't Afford to Make

Picture this: You and your spouse spend decades building a successful business, accumulating assets, and creating a stable life for your family. You think you've done everything right with your estate planning. Then tragedy strikes, and a simple paperwork error costs your children $1.5 million in taxes they never should have owed.

This isn't a hypothetical scenario—it's exactly what happened to the Rowland family in Ohio. In this article, you'll discover the costly mistake that devastated this family's legacy, why it's becoming an increasingly common problem for wealthy families, and most importantly, how to make sure it never happens to yours.

When "Good Enough" Estate Planning Becomes a Family Nightmare

Billy Rowland was the kind of guy who wore a "World's Greatest Grandpa" cap and spent his life building something meaningful. Over decades, he expanded his small businesses across Ohio—trucking, used cars, real estate, banking. He served on charity boards and seemed to have his financial house in order.

When Billy's wife Fay died in 2016, her estate filed the required tax return to preserve her unused estate tax exclusion for Billy's future use. It seemed like routine paperwork. The return estimated her estate's value and listed various assets—real estate, business shares, the usual suspects.

But here's where things went sideways: The return didn't spell out the specific value of each individual asset. To most people, this might seem like a minor detail. After all, they provided the total estate value, right?

Wrong. That one "minor" detail cost Billy's heirs $1.5 million when he died in 2018.

The IRS ruled that because Fay's estate return was incomplete, Billy's estate couldn't use her $3.7 million unused exclusion. Without that protection, Billy's $26 million estate faced a massive tax bill that could have been avoided with proper planning.

What makes this story particularly heartbreaking is that the error wasn't discovered until it was too late to fix. The IRS didn't raise questions about Fay's return until 2021—three years after Billy died and five years after Fay's death. By then, the window for corrections had slammed shut.

Why This Problem Is About to Get Much Worse

If you think the Rowland family's situation is a rare occurrence, think again. Changes in tax law are making this type of mistake both more likely and more expensive.

Under current law, each person can pass $13.99 million to their heirs tax-free in 2025. That number jumps to $15 million per person in 2026. For married couples who plan properly, that means they can potentially shelter $30 million from estate taxes.

But here's the catch: To get that doubled protection, the first spouse to die must file a proper estate tax return, even if their estate is below the threshold that would normally require filing. Miss a detail on that return, and the surviving spouse loses access to the deceased partner's unused exclusion forever.

The stakes keep getting higher. With estate taxes at 40% (for estates that are worth a million or more above the exclusion amount), a family that loses a $15 million exclusion because of a paperwork error could face a tax bill costing millions. Not to mention, the estate’s assets may not be liquid, and will need to be sold in order to pay the tax bill. In order to generate funds, a family business, the family home, or other meaningful and valuable assets may need to be sold, destroying a lifetime of careful wealth building.

Consider this: Nearly 500,000 Americans now have a net worth of $15 million or more. Many of these families have no idea they're sitting on a potential estate planning time bomb.

Even families with smaller estates aren't safe. Your investments could grow significantly over time, you might receive an unexpected inheritance, your business could take off in ways you never imagined, or the estate tax exemption could go down, as it fluctuates with each administration. What seems like a manageable estate today could easily cross into dangerous territory tomorrow.

The Real Problem: Planning That Fails When You Need It Most

The Rowland family’s experience exposes a fundamental flaw in how most people approach estate planning. Too many people treat it as a one-time transaction—draft some documents, file them away, and assume everything will work out.

But effective estate planning isn't about having the right paperwork in a drawer somewhere. It's about creating a comprehensive system that adapts to your changing circumstances with the support of an attorney who ensures your plan actually works when your loved ones need it most.

Think about what happens in most estate planning scenarios. A family meets with a lawyer, creates a will, a trust, or both, maybe fills out some beneficiary forms, and then considers the job done. Years pass. Laws change. Assets grow. Family situations evolve. But the estate plan sits there, frozen in time, based on circumstances that may no longer exist.

When the first spouse dies, someone (often a grieving surviving spouse or adult child) is suddenly responsible for navigating complex tax rules and filing requirements they never knew existed. They're dealing with paperwork they've never seen, making decisions about legal concepts they don't understand, all while processing grief and family changes.

Is it any wonder that critical details get missed?

The traditional approach to estate planning sets families up for exactly this kind of failure. It focuses on creating documents rather than building a relationship with a trusted advisor who understands your unique situation and can guide you through life's changes.

This is why the concept of "planning that works" is so crucial. It's not enough to have estate planning documents—you need a comprehensive Life & Legacy Plan that evolves with your life and includes ongoing guidance to ensure nothing falls through the cracks.

A Life & Legacy Plan includes regular reviews to make sure your plan still fits your current situation. It involves clear communication with your loved ones about your wishes and the plan's structure. Most importantly, it includes professional guidance to navigate complex requirements like estate tax returns and portability elections.

When Fay Rowland died, someone should have been there to ensure her estate tax return was filed correctly. Someone should have double-checked that all required details were included. Someone should have been monitoring the situation to catch any potential issues before they became disasters.

Instead, the family was left to navigate these treacherous waters alone, and it cost them dearly.

Building Protection That Actually Works

The good news is that the Rowland family's nightmare is completely preventable. But it requires a different approach to estate planning—one that prioritizes ongoing relationships and comprehensive planning over simple document creation. That’s what my Life & Legacy PlanningⓇ process is all about.

Here’s what you need to know about why Life & Legacy Planning works:

Estate planning isn't a "set it and forget it" proposition. Your plan needs to grow and change as your life evolves. This means regular reviews with me, so I can spot potential problems before they become disasters.

If you're married and have significant assets, don't assume that basic estate planning documents are enough. You need a comprehensive strategy that considers tax implications, coordinates with all your other financial planning, and includes proper guidance for complex decisions like portability elections. I have these systems in place.

Make sure your family knows the plan. Too many estate planning disasters happen because surviving family members don't understand what needs to be done or when critical deadlines are approaching. Your loved ones shouldn't be learning about your estate plan for the first time after you're gone. Instead, I’ll support you to have open communication with your loved ones before you die, and be there for them after you die. They’ll never be left wondering what your intentions were, what to do, or how to do it.

Finally, when you work with me, I’m not just a document preparer. I am a trusted advisor who will be there for your family when decisions need to be made, will ensure that required returns are filed properly, and will monitor changing laws that might affect your plan. You don’t need to worry about your plan failing and your loved ones paying the price, because I’ll be there to ensure it works.

The Rowland family's story is a stark reminder that in estate planning, small details can have enormous consequences. Don't let a paperwork error destroy the legacy you've spent a lifetime building.

Protect Your Family's Future Today

Your family's financial security is too important to leave to chance. The Rowland case shows us that even successful families with significant assets can lose millions because of estate planning mistakes that could have been easily prevented with proper guidance and a trusted advisor who’s there for you throughout your life and for your loved ones after you die.

As a Personal Family Lawyer® Firm, I help families create comprehensive Life & Legacy Plans that actually work when you need them to. My process ensures that your assets are protected, your loved ones understand the plan, and all the technical requirements are handled properly—so you never have to worry about a costly mistake derailing your family's future.

With the right planning, you can rest easy knowing that your legacy will be preserved exactly as you intended and your life's work will benefit the people you love most.

Don't let your family become the next cautionary tale. Click here to schedule a complimentary 15-minute discovery call and take the first step toward protecting your family's future:

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