Creating a last will and testament is crucial for ensuring your assets and property are distributed according to your wishes after your death. However, missteps in the process can lead to confusion, delays, and additional costs for your loved ones. Here, we explore the top five mistakes people commonly make with their wills and provide guidance on how to avoid them.
Improper Execution of the Will
One major mistake people often make is not properly executing their will. For a will to be valid, it generally needs to be signed in the presence of two witnesses who also sign it. After your death, these witnesses may be called upon to verify that the will was indeed yours.
While it might seem like a mere formality, signing the will correctly and having witnesses is crucial. Think of it as the final move in a gymnastics routine – sticking the landing is essential!
If your will is not signed correctly or lacks the necessary witnesses, it could be challenged in court and potentially invalidated. In that case, your estate would be managed as though you didn’t have a will at all, meaning state law would dictate who inherits your assets. This could be problematic, especially if you intended to leave something to a charity, as charities cannot inherit assets through state intestacy laws.
To prevent these issues, be aware of your state’s requirements for executing a will. In most states, this involves signing in front of two disinterested witnesses, meaning they are not beneficiaries in the will and have no stake in its contents.
Failing to Update Your Will
Creating a will isn’t particularly enjoyable, and once it’s done, it’s tempting to put it away and forget about it. However, your will is only useful if it accurately reflects your current life situation and relationships. As circumstances change, so should your will.
Experts recommend reviewing and updating your will every three to five years or whenever significant life events occur, such as:
- Buying real estate
- Having a child or grandchild
- Getting married or divorced
- Moving to a new state
If only minor changes are needed, you might consider writing a codicil, a legal document that amends your will without requiring a complete rewrite. However, technology has made it easier to update your will online, making codicils less common.
Overlooking Non-Probate Assets
Non-probate assets are those that do not pass through your will but are transferred to beneficiaries via separate forms. Common non-probate assets include retirement accounts and life insurance policy payouts.
Even though these assets don’t go through your will, they still impact your estate plan because the beneficiaries named on these accounts override anything written in your will. For instance, if you remarry but forget to update your life insurance beneficiary from your ex-spouse, the payout could go to your ex-spouse instead of your new one, regardless of what your will says.
To avoid such scenarios, regularly check and update the beneficiaries on your non-probate assets to ensure your estate plans align with your current wishes.
Neglecting Digital Assets
In today’s digital age, your online presence is a significant part of your life, yet many people forget to include digital accounts in their estate plan. Without a record of these accounts, it can take your loved ones a long time to find them, and in the case of cryptocurrencies, they might be lost forever.
Consider using a password manager or digital vault to keep track of your online accounts, ensuring someone can access important accounts to manage bills or retrieve tax documents. You can also name a digital executor in your will, someone who will manage or close your online accounts as per your instructions. Additionally, list your digital assets in your will and specify what you would like done with them.
Not Having a Will at All
One of the most significant errors is not having a will in the first place. Many people believe they do not need a will because they’re too young or not wealthy enough. However, every adult should have a will, regardless of age or income.
A will is not just for distributing property; it’s also for naming caretakers for pets, choosing guardians for minor children, and designating charitable donations. Moreover, having a will can expedite the probate process, saving time and money for your loved ones and ensuring your wishes are honored.
Take Control of Your Legacy by Making a Will
The good news is that these common mistakes are easily avoidable. By paying attention to the proper execution of your will, regularly updating it, managing non-probate assets, including digital assets, and ensuring you have a will in the first place, you can secure your legacy and provide peace of mind for your loved ones.
Creating a will doesn’t have to be daunting. Modern tools make it easier than ever to draft, update, and secure your will, ensuring your final wishes are respected and your loved ones are cared for.
