How to Avoid Common Mistakes People Make in Their Will

Making a mistake in your will, even a little one, can mean that your assets will not go to the people you intended. Shutterstock

Making a mistake in your will, even a little one, can mean that your assets will not go to the people you intended. You may never know it because these problems are often only revealed after you are gone. Knowing what the biggest mistakes are can help you avoid them.

Not Designating Who Gets What

Even though children may get along well during your lifetime, their attitudes can change when it comes to dividing up your assets. You should avoid using generalized statements such as letting your children divide the assets. One or more of them may have shown a keen interest in some of them, and it is a good idea to designate that asset to them.

List all your assets before making a will, then decide who will get what items. Things like life insurance, bank accounts, retirement accounts, investments, etc., should all have beneficiary names with a secondary. If you only have one name on these accounts, but your will directs the money in them to be distributed equally, it will not happen. When you name beneficiaries on an account, it will override the will—and only the named beneficiary will receive anything. Make sure that your will and your beneficiaries agree.

These accounts typically bypass probate, but if you name the estate as the beneficiary, they will go through probate. It means you may owe estate taxes on them—at least at the state level.

There may be family members who are not directly related by blood, but you want to keep your assets in the bloodline. FinanceBuzz says you can also add instructions on how money or assets get passed down and who can control them after you die.

Distributing Large Sums of Money

Before designating anyone to receive a large sum of money, attorneys at SteinSperling suggest caution should be given. Some people could be hurt more than helped by suddenly getting a lot of money.

Some of your potential beneficiaries may be irresponsible with finances and may spend it quickly on frivolous things. An adult child could be having marital problems and headed toward a divorce. Someone else may have an addiction to alcohol or drugs.

Various situations can be handled better if you put some assets into a trust. A trust can give you better control, restrict the assets, and provide time frames, which can be essential for minor or irresponsible children.

The Need to Update a Will

Creating a will can be done quickly. Many websites advertise that you can do it quickly. You can put one together in a few minutes, but whether it is still a good idea five or 10 years from now may prove differently.

There may have been grandchildren born into the family that you should include, someone may have died, someone else may have become addicted to drugs, and one of your children may now be divorced, etc. Any of these things could be why you should review your will and update it to cover new life situations.

If you want to disinherit someone, LegalNature gives some advice. They say it is necessary to state in your will that your omissions are deliberate and not a mistake.

Keeping Your Will Safe

After you die, someone needs to know where you keep your will. Keep it with other important documents required to execute your will correctly. The individual can be a family member, a representative, or the executor of your estate. You can keep it in a safety deposit box, a fireproof box, a home safe, or anywhere else it would be protected.

If no one knows where to find your will, or even if you made one, your estate may have to be distributed by the probate court. Someone needs to know where it is and how to access it.

Not Naming an Executor

If you do not name an executor or personal representative to distribute the assets, it will be up to the court to appoint one. It is a responsible position, and he or she must be able to work with the court, members of the family, and financial institutions. It takes a lot of time, effort, and money. A backup individual should also be named but talk to them first and see if they want the job before writing their names down.

Not Appointing a Guardian for Your Children

If you still have young children at home, it is essential to name someone to take them in if you die. Not everyone will want the job, so you need to consider carefully who will make good guardians if necessary.

Create a Living Will, Too

When you create your traditional will, you could make a living will, too. This document, also called advanced directive, tells people how you want to be treated in a hospital when you are incapacitated, unconscious, or near the end of life. The document differs in each state, and you should review it with the doctor whenever you have a hospital stay.

Mayo Clinic says this document will guide family members and doctors in such questions as: Do you want to be sustained on life-support machines when you cannot survive without them? What treatments do you not want, such as mechanical ventilation, tube feeding, dialysis, etc.? Are there religious considerations? Do you want to be an organ donor?

A living will can also help your family have some peace of mind if the time comes when someone must tell the doctor it is time to pull the plug. Some family members may disagree, but if your intentions are spelled out in the document, they can have more peace of mind knowing that it is what you want under those circumstances.

By consulting with an estate-planning attorney or financial advisor, you can ensure that your intentions are clearly stated in your will. They can ensure your documents meet state law and will accomplish your estate goals.

The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.