Leaving Surprises Out of Your Will Can Make Your Heirs Happier

If you have not updated your will for a couple of years, it is possible that someone may be left out. Shutterstock

Although writing a will is often not complicated, simple mistakes can be made. One of the biggest mistakes is to put surprises into the document that the heirs are not expecting.

Surprises in an estate plan can result in problems and disagreements, depending on how well the heirs get along and what they expect. Of course, after the will creator is gone, the heirs may be left wondering what they were thinking at the time.

Dividing the Assets

One problem heirs may face with a will is how the assets are distributed among children and grandchildren. If you have not updated your will for a couple of years, it is possible that someone may be left out or people left in that should not be, such as a divorced spouse.

Having the will state that your assets are to be divided equally among your children is not a good idea. A problem may be created if one of the children dies before you do. In that case, the surviving spouse and their children will not receive any of the assets, and the remaining siblings will get more.

If you have stepchildren, this wording automatically excludes them unless they are legally adopted. If you want your stepchildren to receive some of your assets after you die, you must name them in your will or any other estate-planning documents. According to Legal-Info, stepchildren do not have any legal rights.

A son or daughter may be married to someone who wants control of the finances. If that child dies, the assets may not benefit the grandchildren.

A disabled child may be surprised when you do not leave money for them in a trust. MoneyDoneRight says that passing an inheritance to a disabled child through a simple will means that the child will lose any government financial assistance until the money is spent down to poverty levels. When it reaches that level, the child can receive those benefits again.

Putting the money in a special needs trust can prevent the loss of government benefits. The funds will be available through a trustee under terms dictated by the trust creator.

An Unknown Heir

The sudden appearance of an unknown heir can create conflict.

It can be quite a surprise if someone shows up and claims to be an heir, but no one else knows them. They may want an equal share (or more) of the assets, which could cause a long delay in their dispersal.

It is common practice that beneficiaries get notified when they are named in a will and may receive a copy. FindLaw says that if you expect to be in a will and do not get a notice, you can find it online after being filed with the probate court.

You can also get notified when a will is filed to probate. If there is no will, the court will choose the beneficiaries. Beneficiaries can also get money apart from the will if you are a named beneficiary on a bank account or life insurance.

Disinheriting Someone

A disinherited person may feel wrongly left out if an explanation is not given. That person may contest the will. It is more likely to happen when larger estates are involved. Without a reason, it could be considered an oversight.

One way your estate planning can prevent this is to include a no-contest clause. AndersonHunterLaw says that this clause states that if anyone challenges the will and does not win, they will not receive any assets. It generally prevents challenges, but some states do not enforce this clause.

Irresponsible Adult Children

It may come as a surprise if your will says to divide up the assets equally among the children if one is known to be irresponsible with money. Creating a living trust and putting that irresponsible child’s money in it can enable it to last longer. Money may be dispersed when certain conditions are met, or a portion of it when certain ages are reached.

Steps to Avoid Taxes

The heirs may be deeply disappointed to discover that a large portion of the estate must go to pay estate taxes. Unless you take steps in advance to reduce estate taxes, you could be giving Uncle Sam and your state a larger chunk than you may realize.

Some states charge an estate tax and an inheritance tax. Money from a trust and life insurance is usually not taxed and gets distributed much faster than if it must go through probate. You can avoid taxes on life insurance if you name a beneficiary on the policy.

Instead of waiting until you die to pass on your assets, you can give it to your heirs before you die. It will benefit them right away and reduce the size of your estate at the same time.

Personal gifts can be given up to $18,000 in 2024 ($19,000 in 2025), and Investopedia says these gifts are also nontaxable to the recipient. A couple can give up to $36,000 per year and make a gift to pay tuition or medical bills—if paid directly to the institution. You do not need to report gifts under this limit to the IRS.

Contesting the Will

Not everyone can contest a will. It could be declared invalid if the document was not completed according to state law. Another reason someone may contest the will is if your mental capacity was questionable when you signed it. LegalZoom states that it is unnecessary to be without cognitive issues, but you must understand the assets being willed and to whom they are going.

The possibility of having been defrauded is another reason for contesting a will, which means someone tricked you into signing it. It can also be contested if someone forced you into signing the will, called undue influence.

The best way to prevent surprises in your will is to talk to your beneficiaries and tell them about your plans. It is unnecessary to reveal the details of the money; you only need to inform them that they are in the will. Getting professional counsel from an estate planning attorney can also be helpful.

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.