Most people don’t enjoy thinking about their mortality. However, creating a will and related estate planning documents makes it much better for loved ones to handle the estate after your passing. Estate planning attorneys know there are certain things you should never include in your will, says this recent article, “13 Things You Should Never Put In Your Will” from mondaq.
Joint accounts. Accounts owned jointly or with beneficiary designations pass directly to the surviving owner or beneficiary. Putting them in your will can create confusion and even open the estate to potential litigation.
Personal and private wishes. Don’t use your will to take a stand on family relations or address personal issues from the grave. Settling old scores in a will is a bad idea, as your will becomes a public document, and anyone who wants to can see it.
Business interests for an active business. If your will contains information about a business, it could be easier for the business to function while your estate is being settled. A succession plan and buy-sell agreement are the tools for active businesses, not your will.
Life Insurance. Passing your life insurance policy through a will could lead heirs to lose up to half or a large percentage of estate taxes. Speak with your estate planning attorney about using a life insurance trust instead.
Secure or secret information. Whether personal or business-related, private information will not remain private if it’s in the will. Your will goes through probate and becomes part of the public record, available to prying eyes. Don’t include bank account information, access codes, PIN passwords, keys to crypto, etc.
Significant assets. Even though wills are used to pass assets to heirs after death, this isn’t always the best way to distribute wealth. For instance, if you leave your interest in a business through a will, the court may end up with oversight of their share of the business during probate. Probate also provides a forum for someone to contest their will. Trusts are better tools for leaving assets, since they provide privacy, allow you to dictate highly specific terms and are controlled by a trustee with no court involvement.
Ambiguity. Don’t use vague or general language and expect heirs to figure things out. “I leave my favorite painting to my favorite niece” opens up a world of trouble for the family. Even if you only have one niece, which is your favorite painting? Similarly, a will directing assets to be left “equally to my two children” won’t work if you’ve welcomed another child into the family.
Assets going through probate when there are other options. Most estate plans are designed to avoid assets going through probate whenever possible. Trusts, beneficiary designations, or gifting while you are living, can simplify distributing assets and avoid probate costs.
Tangible personal property. Jewelry or a valuable art collection should not be bequeathed through a will. These assets may require a professional appraisal, which could delay probate. Instead, assign the property to a trust or leave a detailed memorandum outlining how you wish the property to be distributed with the executor.
Funeral and burial instructions. Wills are often read long after funerals have taken place. Your wishes won’t be known or followed. Discuss your preferences with loved ones and document them separately. If you make arrangements in advance with a cemetery and a funeral home, you’ll have the most control over your funeral. Advance planning is a great kindness for your loved ones.
Conditions on gifts and unenforceable conditions. Imposing too many restrictions could complicate your estate and create disputes between beneficiaries. Your wishes will be better set out and made legally enforceable through trusts.
Similarly, unenforceable conditions can create controversy and delay the administration of your estate. Discriminatory clauses, illegal actions, or conditions violating a person’s rights can render your entire will or the specific provisions invalid.
Wills, trusts, and estate planning for everyone. To book a call in Anchorage, Alaska, please contact Mitch Wyatt at https://mkwyatt.com or call 907-277-0300.