Getting your last wishes in writing is key to making sure your desires are carried out after you’re gone and to providing more guidance for the loved ones you leave behind.
“The goal is to provide complete clarity around who you would like to inherit your assets, minimize the length and cost of the probate process, appoint someone you trust to oversee the process, and protect family unity,” said Shon Anderson, a certified financial planner in Dayton, Ohio.
But many people make simple mistakes when creating their wills that can complicate the process after they pass. Here are the most common ones.
Not doing one
The biggest, and perhaps most obvious, mistake is not making a will at all, said David Silversmith, a certified financial planner in Plainview, New York. Sometimes people feel they’re too young to think about death. Or maybe, they don’t think they have enough money to merit a will. Perhaps the process is too cumbersome or intimidating. None of those are good excuses.
“It is important to get their affairs in order,” Silversmith told Cashay. “I have seen many clients who have had their estates taken over by the government’s public administrator because they did not leave a will. When that happens, it could take months or years for the decedent’s beneficiaries to get their inheritance.”
Not knowing what overrides a will
What you put in your will is not the end-all-be-all for your financial affairs. Beneficiaries on your investment accounts, retirement plans, and life insurance policies take precedence over what your will states. Joint tenancy overrides the will as well, said Leon C. LaBrecque, a certified financial planner in Troy, Michigan.
“So if you name one kid on your bank account and three kids in your will, the one kid gets the account,” LaBrecque told Cashay.
Pro tip: Naming the grantor's estate as beneficiary will ensure that all assets flow through the will, according to Taylor Whitt, a certified financial planner in Nashville.
Not updating documents
Given the importance of beneficiaries along with your will, make sure to regularly update both as your life circumstances change, said Edward R. Jastrem, a certified financial planner in Westwood, Massachusetts.
“Monitoring and updating beneficiary designations can be as important, if not more important, than making edits in a Last Will,” he told Cashay. “This could be especially true after a divorce, the death of the first spouse, or with minor children.”
Not naming the right executor
Think hard about who can perform the duties and responsibilities of the executor to settle your estate. Take into consideration other, conflicting interests.
“Sometimes a family member is not the best choice, particularly if you have ongoing trusts for other family members managed by a sibling,”George Reilly, a certified financial planner from Fairfax, Virginia, told Cashay. “Bad results are likely!”
Make sure to tell the person you selected ahead of time, said Austin Frye, a certified financial planner in Aventura, Florida.
“Sometimes they don't want the job and they don't appreciate the surprise,” Frye said. “More often, they are honored to be named. So, don't wait until you’re gone to disclose.”
Pro tip: Have backup executors in case your first choice can’t serve for any reason.
Dividing by dollar amounts
Consider how your financial circumstances will change over the years.
“Assets and net worth can and will change over time,” said Rob Greenman, a certified financial planner in Portland, Oregon. “A fixed dollar amount as a percentage of your total net worth will certainly shift. So sometimes it's helpful to think about distributions to individuals or receiving parties in terms of percentages instead of dollars.”
Forgetting personal property
Some people don’t provide guidance on who gets what personal property that can cause conflict. Typically, personal property — such as clothes, furniture, and jewelry — are supposed to be divided equally among the heirs, said Patti Black, a certified financial planner in Birmingham, Alabama.
“But that can lead to questions about what is ‘equal,’” Black said. “And can lead to fights about pieces that don't have economic value, but have a lot of sentimental value.”
To make it easier, address this in the will for certain items that your heirs find important. Another idea, according to Black, is for beneficiaries to select items in a rotating manner.
Not establishing a bloodline trust
Consider this scenario. After you pass away, your assets are given to your daughter and her husband, a person you never really liked. A few years later, they divorce and he ends up getting half of your hard-earned money. That’s what can happen without a bloodline trust, said Christopher Lyman, a certified financial planner in Newtown, Pennsylvania.
“With a bloodline trust it can be stipulated that only those in your bloodline — direct descendants such as blood children and grandchildren — are the only ones who can receive assets from your estate,” Lyman said.
Forgetting the ‘simple things’
“Some of the biggest mistakes we see in wills can be very simple things, such as not having the appropriate amount of witnesses to sign and date the document,” Anderson said.
Additionally, it’s crucial that any witnesses have no stake in the inheritance you intend on leaving.
“This is a 101 item on a will that needs to be executed correctly to avoid any contests or questions of its legitimacy after you pass,” Anderson said.
Where you store it
Make sure your loved ones know where your will and estate planning documents are located, said Black, who recommends keeping copies at home in a binder and informing the family of the location.
“Another fairly common mistake is to keep a copy of a will in a safe deposit box,” said Henry Fox, a certified financial planner in Blue Bell, Pennsylvania. “Which can add expense and delay in settling one's estate.”
In many states, the box cannot be opened without a court order.
Being able to avoid probate
Wills do not circumvent probate, which can be lengthy and costly in some states. Probate is public record, meaning anyone can access information about your probate. Other documents or strategies can be put in place to avoid probate, if appropriate, Black said.
Pro tip: Consider a revocable living trust if you own out-of-state property.
“If you own out of state property it could mean going through probate in multiple states,” Lyman said. “A revocable living trust can streamline this process and eliminate the need to go through probate in multiple states.”
Not taking care of children
“Making it known to the court system who should be the guardian of person and guardian of estate (finances) for minor children is priority number one for parents who haven’t yet done so,” Anderson said.
Consider a testamentary trust in your will if you don’t want your minor children to inherit all of your assets when they become an adult, usually age 18. That gives you control in how much and when your minor children get your assets and is created during the probate process.
Read more information and tips in our Planning section