5 Mistakes When Drafting Your Will
I tell my clients all the time that a Last Will and Testament is an estate planning tool of last recourse. It’s really what you should use just in case your other estate planning tools fail. One should not rely upon it as their main source of distributing their estate. But if you do have one, make sure it’s drafted to avoid these mistakes.
October 24, 2018
- Don’t name specific investments in your will. You are not guaranteed to still own them at the time of your death. And if you promised that specific bequest to one of your beneficiaries, your estate will purchase it to devise to the beneficiary, which could have significant negative repercussions on the remainder of your estate.
- Be wary of contingencies when making gifts. You may want something for your beneficiaries that they don’t want for themselves, and it could be to the detriment of the other beneficiaries or your estate. Some contingencies won’t even be recognized by the courts and could be determined to be restraints on alienation and void out the contingent bequest altogether. This could mean unintended results for your estate and/or beneficiaries.
- NEVER leave assets to a minor. Legally, they are not permitted to have over a certain amount of property in their name until the age of the majority. If you don’t designate a property guardian or put their money in a trust, the Uniform Minors Act or equivalent state statute will apply and govern when and how that money is distributed to the minor.
- Thinking you’re the first to die is another big mistake. Some people leave gifts for people assuming they will outlive them and then they don’t. The gift still has to go somewhere and if you didn’t plan for an alternate beneficiary, the laws of distribution and lapse, in your state of death will govern who gets it in their absence.
- Not having a residuary clause is a cause for all kinds of problems. Let’s assume when you die you have much more than you had when you drafted your will. Well, where’s it going? If your will doesn’t dispose of it, the laws of intestate succession will. And you have no say in that.