By Paige Webbstock, Staff Writer.
By now you know that having a last will and testament is a certain way to ensure your wishes are met about where your assets will go once you have passed on. Here are 5 common mistakes people make in wills that you can avoid falling into the trap of:
1. Don’t forget about taxes
You can’t afford to forget about something as important as estate taxes – especially because the laws surrounding them are changing continuously. Ensure you include all your assets – including property, insurance proceeds, retirement plans and trusts – in adding your taxes as these can also come under the estate tax system.
2. Appoint a reliable, trustworthy executor
Your executor will be in charge of administering your estate so make sure you choose someone you trust. Note that if your executor is no longer able to serve this duty for any reason, you are going to have to make amendments to your will.
3. Don’t forget to update your will as life goes on
Life changes, obviously. After events such as a divorce, the birth of a child, a big move or starting your own business, you should make necessary changes to your will document. These events can impact your finances and life circumstances, thus, if you want your most up-to-date wishes to be followed in the event of your death, you should take another look at your will document. If you don’t, there could be consequences such as unintended inheritances and leave your assets in a complicated situation. Also, don’t forget to take a second look at the guardians you have named in place for minor children.
4. Also take a look at your intended beneficiaries
When taking a second look at your will, carefully consider who you want to name as a beneficiary. If you are intentionally excluding someone for a particular reason or perhaps distributing your assets in an unusual way, you may want to make a note of this if you so choose. Note that some states do not permit a beneficiary who is also a witness at the will signing.
5. Ensure you dispose of everything
It’s crucial to account for every one of your assets that you wish to distribute. It may also be a good idea to include what-ifs in your will in the event that a beneficiary you have named cannot inherit the asset for whatever reason.
This is especially important as it’s a good way to ensure your assets are not taken by the state. You could include a residuary clause (or ‘leftovers’ clause) as it includes assets that are left over after any specifically names items have been distributed to beneficiaries. If you die with property that wasn’t distributed, it means you have died partially intestate (without a will). Therefore, your state laws will say where this property will go.