Creating a will is one of the most important things you can do to gain peace of mind and ensure your final wishes are honored. However, many people are not as diligent when writing their will, which can lead to conflicts between beneficiaries or lead to inefficient distribution of assets. You can create a legal plan that protects your loved ones and legacy by avoiding these common errors.
6 Common Mistakes When Creating a Will
Failing to Update Your Will
Major life events like getting married or getting a divorce are all instances that require an update in the will. If these changes are not reflected in your will, it may result in assets being distributed in a way you did not intend. As time passes, relationships change, new family members are added, and financial situations evolve. Reviewing and revising your will every 2-5 years is important to ensure it reflects your current situation and wishes. Marriage, divorce, the birth of a child, death of a beneficiary or executor, changes in financial situation, buying/selling a home, etc., are all common life events that require updating a will.
Choosing the Wrong Executor
An executor, a personal representative, is responsible for administering your estate after you pass away. That includes tasks like distributing assets to beneficiaries, paying off debts, and ensuring final wishes are carried out according to the will. Choose someone you trust who can handle legal and financial matters. It can be a family member, friend, or professional fiduciary like a bank. If you do not have a suitable candidate, you can name a bank or lawyer to act as executor for a fee. Or you may establish a trust that can bypass the need for an executor altogether.
Not Providing Enough Details
A will should specify how you want your property or estate distributed. Lacking important details can lead to confusion over your intentions, conflicts between beneficiaries, and assets not being distributed as desired. Some issues that result from incomplete information are:
- Assets distributed unequally or to unintended individuals
- Failure to provide for guardianship of minor children or disabled dependents
- Lack of guidance over a family business
Examples of what you should be focusing on include:
- Specific bequests or gifts of monetary amounts or physical items to named individuals
- Percentage of assets left to beneficiaries
- Provisions for guardianship of dependents
- Guidance on managing a family business
- Payment of final expenses, debts, taxes; etc.
Not Considering All of Your Assets
List everything you own, including financial accounts, real estate, vehicles, collectibles, digital assets, insurance policies, retirement accounts, pensions, annuities, etc. Some assets, like certain insurance policies or retirement accounts, are not legally part of an estate but still need to be accounted for in your planning. There are some commonly overlooked assets in estate planning, namely:
- Public benefits
- Rewards programs
- Loyalty programs
- Timeshares
- Domains/websites
- Virtual currency
- Royalties
It is best to do a full inventory of assets with the help of a financial advisor. After identifying your assets, ensure your will stipulates how each item will be distributed. Certain assets, like retirement funds, life insurance policies, some annuities, etc., are distributed outside the will. An estate planning attorney can ensure all assets are handled properly. You can easily find an estate planning attorney online. Just search for an estate planning attorney in Austin, TX, or wherever you happen to live.
Overlooking Important Estate Planning Tools
Trusts are useful for complex estate plans, passing on assets to young beneficiaries, or avoiding probate. The most common types are living trusts, testamentary trusts, revocable trusts, irrevocable trusts, etc. The power of attorney authorizes someone else to handle financial/legal matters if you become incapacitated, and it ensures your bills, taxes, and other responsibilities are handled.
Healthcare directives include documents like living wills and durable healthcare powers of attorney that allow you to specify your wishes regarding medical care if you cannot communicate them yourself. Therefore, having an estate plan in place can help prevent your beneficiaries from dealing with a long, contentious probate process and it is important not to overlook them.
Preparing Wills Without Legal Guidance
Wills and trusts prepared without legal guidance often contain errors or omissions that do not stand up in court and fail to distribute assets as intended. They also risk challenges from unhappy beneficiaries. A licensed estate planning attorney has the expertise to create customized documents that suit your needs while avoiding common issues that could invalidate or weaken your plan. They stay updated with laws that frequently change.
Conclusion
Planning what happens after you are gone is an important responsibility. By avoiding these common mistakes, working with a qualified estate planning attorney, and keeping your documents up to date, you can craft a will that protects your family and honors your legacy according to your wishes.
Written by: Stephanie Snyder
About the Author:
Stephanie Caroline Snyder graduated from The University of Florida in 2018 where she majored in Communications with a minor in Mass Media. Currently, she is an author, freelance writer, and blogger. She was born and raised in Panama City, Florida where her family still lives. The oldest of four children, Stephanie moved out to Utah to pursue her professional interests in early 2019 and has worked in content creation, blogging, and internet articles ever since.