When reviewing your estate plan, watch out for common traps that can ruin your legacy…

Trap: Lost or obsolete beneficiary designations. Among your most critical estate-planning documents are the beneficiary designations you have filed for employer-provided retirement plans, IRAs, life insurance policies and investment accounts.

And yet these are also among the most likely of your documents to be lost or out-of-date. Examples…

• IRA beneficiary designations filed years ago with banks and brokerages that have since gone through mergers and reorganizations often are simply lost. In that case, when you die, your IRA will be distributed according to state law by a “default” method that’s probably contrary to your intent. It may even result in a big tax bill that could have been avoided.

• Any beneficiary designation you made years ago could now be obsolete due to changes in your family circumstances—such as divorce, remarriage, death of a family member, birth of a child or simply a change in the financial needs of family members.

Obsolete beneficiary designations could send funds to the wrong person—even to a former spouse or a family member from whom you now are alienated.

What to do: Check all of your beneficiary designations, and update them where appropriate. Do this once a year. Keep copies of them with your will and other estate-planning documents.

Trap: Inadequate life insurance. You need enough insurance to cover your family’s financial obligations after your death.

What to do: Update your coverage when your family’s needs change.

Examples: To cover future mortgage payments after buying a property…for children’s schooling.

If you own a private business, you may have extra insurance needs—such as to help the business survive until it can be sold. If you have a buyout agreement with your partners, insurance can be used to fund the purchase of company stock.

Opportunity: Life insurance costs have fallen in recent years—so while improving your coverage, you may actually reduce your premiums.

Trap: An old will and planning documents. If your estate-planning documents are three years old or older, they probably contain costly mistakes.

Beware: The federal estate tax law has been changing year by year. Many states are changing their own estate tax laws as the federal law changes. Nontax laws affecting inheritances frequently change.

What to do: Review your estate-planning documents with an expert at least every third year—or sooner if your situation changes.

Trap: Long-term-care exposure. Most people greatly underestimate the risk that they will need long-term nursing care. They especially underestimate it during their working years, while they are still relatively young, when need for care may result from a disabling injury or illness.

Danger: Nursing care can cost $10,000 a month or more and wipe out a family’s lifetime savings, leaving nothing for heirs.

Safety: If you’re still working, ask your employer whether long-term-care insurance is available as a benefit and whether you can maintain the coverage after you leave the company. If coverage isn’t available through an employer—and to cover exposure during retirement years—consider buying your own long-term-care policy.

Trap: Disability exposure. During your working years, you are more likely to become disabled than to die—yet far more people lack disability insurance than life insurance.

Safety: Check to see if disability insurance protection is provided by your employer. If not, or if it’s inadequate, consider buying a policy.

Trap: Lawsuit exposure. A lawsuit brought against one family member could reach the entire family’s assets. Risks and what to do about them…

• When one spouse owns a business or is in a profession that could generate business or malpractice liability, a plaintiff’s claim for damages could reach personally owned assets.

Safety: Organize a business as a corporation or limited liability company to limit personal liability for claims against it…buy business liability and malpractice insurance…have the spouse with less risk for a lawsuit own personal assets. You will need professional help to set all this up.

• If you have a home office, injuries to a business visitor may not be covered by your homeowner’s insurance policy.

Safety: Buy an insurance rider protecting the office.

• Lawsuit claims are becoming so large today that even common claims from auto and slip-and-fall accidents may exceed standard auto and homeowner’s insurance coverage limits.

Safety: Buy at least $1 million of additional “umbrella” liability insurance (also called personal excess liability) against auto and homeowner claims. It may cost only a few hundred dollars a year. If your estate is worth more, increase the coverage.