Avoid These Will & Testament Pitfalls

It may sound simplistic, but making sure you’ve let your heirs know where your inheritance plans, paperwork, and passwords are and how to access them is one of the top problems with wills. How about the conventional wisdom of leaving each child an identical windfall in your will? That seems to make sense, but there’s a difference between an equal and an equitable inheritance.

These are just two of the problems that can come up with wills. Let’s take a closer look at other possible issues.

Lack of Communication and Planning

For example, your heirs might not know where to find your estate plan and paperwork. Even if your children know that you have a safe deposit box in a bank, they may not know which bank or where to find the key. If they’re not listed with the bank as having access to the box, they may need a court order to get it opened.

Create an “in-case-of-emergency” folder that provides your loved ones with the information they’ll need about where to find your estate documents and the information necessary to handle your banking, taxes, bills, and other issues if you become incapacitated or pass away.

Dividing Your Estate Among Offspring

When each child has nearly the same needs and is similarly situated in life, each child should receive the same amount. But when one child always loved the family beach house and is the only one still living near it, it may make sense to bequeath it to that one and give other assets to any other children. Maybe one of your offspring is acting as your caregiver and you want to grant a reward for that devotion or to compensate for lost time and wages. In these scenarios, you’re following the equitable guideline. A blended family may change the dynamics of the divvying up as well.

Vague Language

Don’t write just that your jewelry should be divided among your children. This kind of imprecise language can end up causing a rift among siblings if more than one wants the same brooc. Sometimes a will specifies that the deceased had a verbal agreement with an heir to share the money with another family member. Without specific language in place, there’s no guarantee that your heir will do what you ask. Beware of informal agreements created to protect assets for minors who cannot directly inherit; they often don’t work. For situations like that, it’s preferable to create a trust to ensure the money goes to the person you want to have it.

Out-of-Date Beneficiary Information

Don’t forget to update your will. Relationships change. Make sure you’re not unintentionally leaving money to ex-spouses, estranged siblings, or others who may be deceased or no longer a part of your life. Aside from your will, you should also update beneficiaries on 401(k) and IRA accounts.

Even well-planned estates can cause problems. The important thing to remember when planning what you are going to do with your wealth is that it’s your money and you have a right to do with it what you choose. Just be aware that you need to be clear about what you intend. Contact a lawyer, like an estate planning lawyer from Bott & Associates, Ltd., as soon as possible to be sure your assets will be distributed properly.