A last will and testament is an important part of your estate-planning documents. Using this document, you can express your wishes for how your possessions will be distributed, name an executor to manage your estate, and appoint guardians for minor children or pets. Accounts with beneficiaries should be left out of your will to avoid conflicting instructions with unexpected distributions.
Ideally, you will review and update your will regularly, especially after marriages, divorces, births, and deaths. However, life throws curveballs, so it is better to avoid putting some things in your will in case you are not able to make the updates or changes needed.
1. Funeral and Burial Instructions
While it is important to ensure your family understands your funeral plans, and pre-planning can save them time and anxiety during a stressful time, a will is not the ideal document to convey your wishes.
A will is not typically shared with family members until after the funeral. Instead, share your funeral instructions in a separate document or file them with your chosen funeral home and let your family know where the information can be found.
2. Retirement Accounts
Retirement and other accounts should have beneficiaries listed. The assets in these accounts are passed to the beneficiaries without going through probate.
Listing your retirement and other accounts in your will increase the possibility that there will be conflicting instructions. The beneficiary designation supersedes the information in the will. Having your accounts listed in your will increases the likelihood that you will update this information and inadvertently forget to update your beneficiaries on your account.
Adding your retirement and other accounts with beneficiaries to your will also increases the possibility of legal challenges, especially if the information in your will conflicts with the beneficiary designations on your accounts.
3. Life insurance Policies
Like retirement and other accounts, life insurance policies should have beneficiaries listed. Your life insurance policies will be paid to your designated beneficiaries upon your death.
If you choose to include your life insurance policies in your will and the beneficiary designation is not the same as your life insurance policies, it has the potential to cause conflict and potentially lead to lawsuits among your family members.
If your life insurance policy is financially significant and you pass your life insurance policy through your will, your beneficiaries may lose a lot of the policy’s value in paying estate taxes. Consider using a life insurance trust instead.
4. Jointly Owned Property
If you own property jointly with another family member, such as your spouse, the title to the property will automatically pass to the co-owner. Property held in joint tenancy, unless designated otherwise, has rights of survivorship. This means that when one co-owner dies, the property or account is automatically held in full by the surviving co-owner.
If you live in a community-property state, property that you and your spouse have jointly owned throughout your marriage will automatically go to your surviving spouse.
5. Business Instructions
Reading a will and going through the probate process can take months. This delay makes a will an ineffective document for sharing timely business information or even to transfer ownership of a business. It can lead to loss of profit and even have a significant impact on whether the business survives.
Instead, develop a succession plan that will be used to transfer your business interests to your selected heir. Your Katzner Law Group estate attorney can help you create a comprehensive estate plan that includes a succession plan for your business.
6. Conditional Gifts
Attaching conditions and stipulations when passing your gifts to your heirs in your will complicates matters for the executor. Ambiguity and inconsistency in your descriptions and requests can make it even harder to understand your intent. This can increase the risk of conflict among heirs and lawsuits.
Work with your estate attorney to ensure that your will contains the appropriate language to clearly and concisely convey your wishes and leave little to no room for interpretation.
7. Personal Messages
A will is a formal legal document that is used to transfer assets from one generation to the next. Avoid putting personal messages about why you chose or chose not to bequeath assets to specific individuals.
A will is a public document. Sharing personal or private information in a will, especially when you are no longer alive to answer questions or provide feedback, can be very hurtful for the recipients of this information. Personal messages in a will may not be legally enforceable and may not lead to your desired outcomes.
8. Secret or Secure Information
Since wills go through the probate process and this public process exposes your information to the public, it is not a good idea to put secret or secure information, such as passwords or detailed banking information, in your will.
Put confidential information such as PINs, passwords, bank account numbers, medical information, and keys to crypto and other digital assets on a separate confidential document.
To pass on personal information or personal property, state in your will that a personal property memorandum contains this information. This allows you to trust this confidential document to one or two people and keep it from becoming publicly available.
9. Special Needs Beneficiary Provisions
If you have a child or other beneficiary with special needs, transferring assets directly to them through your will can disqualify them from being eligible for government benefits or support programs.
A special needs trust is designed to hold and manage assets for your beneficiaries with special needs. The trustee you choose to oversee the account will manage the assets in your trust and distribute them according to the instructions in your trust document. An experienced estate attorney can help you structure the trust so it provides for your beneficiary’s current and future needs while allowing them to keep their eligibility for support programs.
10. Assets held in Trusts
A trust is the ideal estate planning tool for transferring assets from one generation to the next. Assets in a trust do not need to go through the lengthy and expensive probate process.
A will is an important part of a comprehensive estate plan. In the past, many people thought trusts were only for the rich. This is not the case. Contact a Katzner Law Group attorney to learn more about creating a comprehensive estate plan.
If you have questions about transferring wealth across multiple generations or want to learn about how to protect your assets and property with a comprehensive set of estate planning tools, contact us.