Being more concerned about your loved ones’ well-being and financial security after you leave is natural. You know that drafting a will is an essential legal tool to ensure someone will deal with your assets according to your wishes.
However, the process can be fraught with potential pitfalls. While you may understand the importance of having a will, you may overlook the essential details that can result in mistakes. This could cause complications and disputes among your loved ones.
Explore the top five mistakes people make when drafting a will, which can lead to difficulties and challenges. Learn how a wills attorney can help you avoid these and handle every complication that may come along the process.
1. Drafting A Will Without Legal Guidance
Consulting an estate planning attorney is crucial when drafting a will. They will ensure it is accurate, valid, and legally binding. Although several DIY will-creation tools are available, using them without legal guidance can put your will at risk.
If a will becomes invalid due to mishandling or omitting vital elements, it may cause severe complications for your loved ones. The divisions of your assets might be under the intestacy rules in your jurisdiction, which might not align with your intended wishes. This could lead to misunderstandings and legal disputes among your heirs, risking their financial security and well-being.
Seek Legal Advice
A skilled wills lawyer will carefully evaluate your circumstances and provide tailored advice. They will ensure your will reflects your wishes accurately.
Your lawyer can assist you in naming appropriate executors, guardians, and beneficiaries while handling complex matters like tax implications and inheritance laws. This attention to detail ensures your will remains legally sound and protects your loved ones from unexpected disputes or delays.
While drafting a will without legal guidance might seem straightforward, the consequences of making mistakes can be detrimental. That’s why it’s essential to consult an estate planning lawyer to ensure your will is legally sound.
2. Not Considering All Assets
A comprehensive list of assets is essential for a practical and clear will. However, certain estate types, such as digital assets and smaller physical items, often need to be included. You must account for all your properties to ensure the distribution process and impact your beneficiaries positively.
When categorizing assets, people commonly remember significant assets like real estate, vehicles, and jewelry. However, some easily overlooked but equally essential are digital ones and smaller physical possessions.
Digital assets include social media accounts, email, digital photographs, eBooks, and cryptocurrency. Smaller physical items often missed include antiques, artwork, collectibles, or other sentimental pieces.
Keep An Updated Inventory Of Assets
Keeping an updated inventory of all your assets—including digital and small physical items—is integral to estate planning. Over time, your properties may naturally fluctuate from gaining new assets or disposing of old ones.
Moreover, the implications of not accounting for all assets can negatively impact beneficiaries. Assets that are not in the will can end up in intestacy. This will divide your properties by standard legal processes rather than your instructions in the will.
Regularly updating your will and consulting with your lawyer can also help you include all the critical considerations, including the possibility of incapacity.
3. Failure To Consider The Possibility Of Incapacity
While drafting a will is essential for preparing for the future, the possibility of becoming incapacitated is also worth considering. Establishing a power of attorney and an advanced healthcare directive can ensure that someone will manage your affairs according to your wishes. They are beneficial if you cannot make those decisions yourself.
There are several misconceptions surrounding incapacity planning:
- Incapacity is only for the elderly. Incapacity can affect people of all ages and result from unexpected accidents or illnesses.
- Incapacity documents need to be more helpful while still healthy. Having the necessary documents before incapacity ensures someone will respect your desires during difficult circumstances without causing stress for your heirs.
- A will is sufficient to protect your preferences. A will mainly deals with the distribution of assets after death and doesn’t account for financial or healthcare decisions during incapacity.
Establish Power Of Attorney & Advanced Healthcare Directive
Power of attorney (POA) allows you to appoint an agent to manage your legal and financial affairs if you become incapacitated. A POA can come into effect immediately or if a specific event occurs, such as incapacity. This ensures your chosen representative can act on your behalf without delay.
An advanced healthcare directive grants a chosen individual the authority to make medical decisions for you if you can’t communicate them yourself. This includes decisions about life-sustaining treatments, end-of-life care, and pain management.
Incapacity can arise for various reasons, such as an accident, illness, or cognitive decline. Planning for it is essential, ensuring your medical, financial, and legal affairs are according to your desires.
Addressing the possibility of incapacity and drafting a will is an important part of estate planning. However, you might risk disputes and misunderstandings among your beneficiaries if you don’t regularly update it.
4. Failure To Update The Will Regularly
A will is not a document to be drafted and then forgotten about. Life changes, and your wishes for your estate may as well. There are numerous instances when you should consider revisiting and updating your will, including:
- Marriage or divorce. These events can dramatically change the structure of your estate and beneficiaries.
- Birth or adoption. Adding a new family member (like a child or grandchild) requires an update of your will to include them as beneficiaries.
- Death of a named beneficiary or executor. If someone in your will passes away, their portion will typically either go to their heirs or among the remaining beneficiaries. An update would ensure your assets go where you want them.
- Change in assets. If you acquire significant assets or sell or donate the ones you mentioned in your will, you should update them. This is important to reflect your current holdings accurately.
- Relocation. Moving to another state or country with different estate laws can impact the validity and execution of your will.
Ensure To Update Your Will
An outdated will can lead to confusion, disputes among your beneficiaries, and potential legal battles. Your assets may also be distributed differently than your current desires, leaving your loved ones disappointed or financially strained.
As time passes, people’s lives and circumstances inevitably change, from relationships to assets to changes in the law. Updating your will to reflect these changes maintains its relevance and effectiveness.
A will that matches your current circumstances can ensure the proper distribution of your assets according to your present wishes. This can also remove ambiguity and help you plan for estate taxes and debts.
5. Neglecting To Plan For Estate Taxes & Debts
Planning for estate taxes and debts is essential to the planning process. If overlooked, it can significantly impact the value of the inheritance and, consequently, the beneficiaries.
The government levies estate tax on an individual’s estate after death before distributing it to the beneficiaries. This includes the “gross estate” value, which involves cash, real estate, insurance, trusts, annuities, and other assets.
If estate planning does not adequately prepare for taxes, the impact can be significant, reducing the value of the inheritance. Federal estate taxes can climb up to 40% depending on the estate size, although exemptions often apply. Planning for these estate taxes can dramatically shift the amount your heirs can receive.
Address Debts When Planning Your Will
When an individual dies, their debts do not simply disappear. The deceased’s estate pays the unsettled debts, such as car loans and mortgages, before beneficiaries receive their inheritance.
If these debts are substantial, they can deplete the estate’s value, leaving little, if anything, for the intended beneficiaries. Hence, addressing how to handle your liabilities in your will can help ensure your beneficiaries can take unexpected financial responsibilities.
To avoid this from happening, be sure to seek legal advice from your estate planning attorney. They can provide legal strategies to protect your estate and loved ones from heavy tax burdens.
Let An Estate Planning Attorney Help Draft Your Will
Seeking the guidance of an estate planning lawyer in your local area can be an invaluable step toward drafting an effective will. They can help you navigate the legal requirements and essential considerations. This includes beneficiary designations, asset distribution, and tax implications.
Even minor oversights when drafting a will can have significant consequences, leading to potential disputes or invalidating the document. An attorney can guide you to prevent such pitfalls, ensuring your will accurately reflects your wishes and is legally enforceable.
It’s essential to be mindful of the common mistakes made when drafting a will to ensure seamless distribution of your assets in the future. These pitfalls include failing to update the document periodically, overlooking the potential of incapacity, and neglecting to plan for estate taxes and debts. By being proactive and deliberate in your approach, you can mitigate these mistakes and ensure your will accurately reflects your wishes.
Securing guidance from estate planning lawyers in your local area can provide invaluable assistance in navigating the complexities of estate planning. With their comprehensive knowledge and understanding of estate laws, they can guide you in making informed decisions in drafting your final wishes.