Lawyers Share 15 Costly Mistakes People Make in Their Wills

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Lawyers Share 15 Costly Mistakes They See People Make in Their Wills (financebuzz.com)

Don’t Let Your Last Will and Testament Turn into a Family Feud: 15 Common Mistakes to Avoid

Writing a will is one of those grown-up tasks that many of us put off, but it’s a crucial document that ensures your wishes are honored and your loved ones are protected. However, even the best intentions can go awry, leading to confusion, legal battles, and even family squabbles.

We’ve chatted with estate planning attorneys from across the country to uncover the most common blunders people make when drafting their wills. Their expert insights will help you create a document that truly reflects your desires and safeguards your family’s future.

1. Leaving Specific Assets, Not Percentages

Many people try to give specific items, like their house or a particular bank account, to an individual. But what if you sell that house or spend down that account?

Tracy A. Craig, a partner attorney at Seder and Chandler, suggests a fairer approach: leave each heir a percentage of your entire estate.

This way, everyone gets their fair share, regardless of how your assets change over time.

2. Naming Minors as Direct Beneficiaries

It might seem sweet to name your grandchild as a beneficiary, but Craig warns against it. Minors lack the legal authority to receive assets, meaning your family will have to jump through court hoops to access the inheritance. Instead, set up a trust to ensure the assets are managed responsibly until the child becomes an adult.

3. Relying Solely on Beneficiary Designations

Thinking you can skip a will by simply naming beneficiaries on all your accounts? Think again!

Craig points out that this leaves no one to handle taxes, pay creditors, or ensure a fair distribution of assets. A well-drafted will designates an executor to oversee your estate, preventing unnecessary complications.

4. Failing to Explicitly Disinherit Someone

If you want to exclude a relative from your will, simply omitting their name isn’t enough. “One of the most common errors I see frequently in DIY wills is disinheriting someone without explicitly naming them and directly stating the decision to disinherit,” says attorney Justin Kennedy of Kemp, Schaeffer, & Rowe.

This oversight can lead to lengthy legal battles. Name them directly, state your decision, and you’ll remove their legal standing to challenge the will.

5. Attempting to Control Inheritance From the Grave

Some folks try to dictate how their heirs spend their inheritance long after they’re gone. Kennedy notes that a will doesn’t allow you to enforce these post-mortem conditions. If you desire permanent control over how your money is used, establishing a trust is the way to go.

6. Not Including a No-Contest Clause

Worried about family disputes? Kennedy recommends adding a “no-contest clause” to your will.

This provision deters beneficiaries from challenging the will, as doing so could mean forfeiting their inheritance. Without it, legal battles can drag on for years, delaying asset distribution.

7. Using DIY Will Services

While online will-making services might seem convenient and cost-effective, Katherine A. Southard, an estate planning attorney with Southard Estate Planning, cautions against them.

“A lot of online programs don’t consider state laws and regulations,” she explains. Consulting a local attorney ensures your will meets all legal requirements in your jurisdiction.

8. Not Transferring Assets Into a Trust

Many people wisely set up trusts for a more streamlined way to pass down assets. However, a common oversight is failing to properly “fund” the trust by transferring assets into it.

“If you don’t properly transfer your [house] deed into your trust, then that asset will go through probate,” says Southard. Remember to also set up retirement accounts with the correct individual beneficiaries and the trust as a successor beneficiary.

9. Not Updating Beneficiaries After Major Life Events

Life happens, and your will needs to keep pace. Major life events like births, deaths, and divorces necessitate updates to your will. Southard’s firm has seen instances where an ex-spouse inadvertently ends up with assets because a client forgot to update their beneficiary designations after a divorce and remarriage.

10. Naming Co-Executors Who Can’t Work Together

Parents often name both their children as co-executors to avoid showing favoritism. However, if your children can’t cooperate, this can quickly turn into a nightmare.

Southard recalls a case where two adult children argued over everything, even a hammer, leading to such neglect that an inherited home was damaged beyond repair. Choosing a single, responsible executor can prevent these costly conflicts.

11. Ignoring Digital Assets

In our increasingly digital world, your online presence holds value. Derek Jacques, an attorney with Mitten Law Firm, emphasizes the importance of addressing digital assets like Facebook accounts, cryptocurrency, or even photos stored in the cloud.

Failing to do so can create tension among your descendants. Include a digital asset provision in your will to ensure access and management of your online property.

12. Not Storing the Will Properly

A will is useless if no one can find it or if it’s damaged. Jacques advises storing paper wills in a strongbox or safe to protect them from fire or water. It’s also crucial to inform trusted individuals where your will is kept.

13. Failing to Choose a Reliable Executor

The executor plays a vital role, yet many people pick someone unprepared for the responsibility. Jacques has seen executors who fail to notify all relevant parties during probate. The creator of the will (testator) should choose a reliable executor who is familiar with both the beneficiaries and the estate to avoid delays, disputes, and mismanagement of funds.

14. Not Reviewing the Will Regularly

Life is dynamic, and your will should be too. Jacques recommends reviewing your will at least once a year.

Beyond marriages, divorces, births, and deaths, property transfers like buying or selling a home, or the birth of new beneficiaries like grandchildren, all necessitate updates. “All of this needs to be updated in your will, or else you risk a lengthy probate process,” says Jacques.

15. Not Writing in Plain Language

Unclear or overly complex wording in a will can lead to confusion and disputes. “I see a lot of clients that don’t use precise language, making their intentions hard to decipher,” explains Jacques. Writing in straightforward, easily understood terms will make your intentions crystal clear for both your beneficiaries and your executor.

Bottom Line

Writing a will is a fundamental step in protecting your assets and ensuring your final wishes are honored. By avoiding these common mistakes, you can create a will that provides clarity and security for your loved ones, minimizes tax liabilities, and ensures your legacy is handled exactly as you intend. Consulting with a qualified attorney is always the best way to navigate these complexities and safeguard your wealth for those you care about most.