Planning for — or even talking about — death can be challenging, so it‘s a topic many of us prefer to avoid. In fact, a Gallup poll found that less than half of Americans have a will.
But writing a will is essential for you and for the family and friends who may be charged with handling your estate. It’s a critical aspect of preparing yourself financially .
Before you begin putting your will together, jot down these mistakes to avoid.
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1. Not updating your will
Just as investments need to be revisited and rebalanced depending on changes in your life, your will may need updating.
Take into consideration major life changes, such as a new baby or new home, as well as financial issues and business-related income and expenses.
Own a car? Here's 7 warning signs you're paying too much for car insurance. 2. Ignoring the taxes
Estate taxes can hit your beneficiaries. So consider finding a way to protect them from that tax bill.
It might be a good idea to consult with an accountant when considering your estate planning so you can address tax issues now.
3. Forgetting your beneficiaries
As you consider who will receive your property, remember all of the beneficiaries you may need to mention in your will — beyond the obvious.
This could include children who are under the age of 18 or family and friends who should receive specific items from your estate
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4. Signing incorrectly
It may seem like an afterthought, but signing your will properly can save your executor and beneficiaries some headaches later. When you talk to your attorney, get a clear idea of who can and can’t legally sign your documents.
5. Ignoring other account holders
Remember to consider other individuals who may have joined you in joint endeavors, accounts, or debts.
If you forget to account for a mortgage with more than just your name on it, for example, there can be unintended repercussions.
6. Skipping a living will
Your will can be executed after your death, but you may also want to put a living will in place to handle any issues that arise while you’re still alive.
This can help your caregivers understand your wishes in case of an emergency or any end-of-life decisions that may need to be made without your input.
Consult with a physician or other medical professional who helps you better understand the decisions you may need to make as part of your living will. A detailed living will can help an executor and medical professionals carry out your wishes.
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One of the major decisions regarding your will is choosing your estate’s executor. The executor of your will should be the person you feel will be most responsible when distributing your property after your death.
Pick someone you think can be responsible and professional when dealing with your estate. And as with other items in your will, change the executor as necessary when you refresh documents.
8. Being vague with descriptions
Think about what you plan to leave to your beneficiaries, and make sure your descriptions for those items are precise. Include all important information, including documentation.
Physical items should also have detailed physical descriptions so your executor doesn’t run into issues while dividing your assets.
9. Forgetting the leftovers
Distributing everything to your beneficiaries or other entities may be difficult or impossible.
For items that aren’t given a specific target, consider adding a clause for leftovers in order for those unnamed items to be adequately distributed after your passing.
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10. Not naming beneficiaries on investments
In addition to your will, it may be a good idea to name any beneficiaries on financial accounts, insurance payouts, pensions, and other monetary assets.
Remember that, as a general rule, the beneficiaries you name for financial accounts trump the instructions in your will.
Check with a legal professional or financial advisor to see how you can get legal beneficiaries named.
11. Not adding a bloodline trust
A bloodline trust helps make sure your estate stays with your family.
Are there people who may benefit from inheriting your assets but aren’t directly related to you? For example, you may have a son-in-law, daughter-in-law, or stepchildren who aren’t directly in your bloodline. Do you want to ensure they don’t have a claim on your estate?
If so, it may be a good idea to specify how money or assets will be passed down and who controls them after you’re gone to protect your descendants.
12. Forgetting to provide for your children’s guardians
If you have children under the age of 18, think about providing for the people who will take care of the kids after you are gone. How will these guardians pay for everyday things or major expenses like college tuition?
You don’t want someone struggling to raise your children simply because an inheritance is locked away until your children turn a particular age.
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13. Misplacing your will
A will is an important legal document, so you should treat it as such. Put it in a safe place, somewhere an executor can easily get to it if needed.
Make sure your attorney has a copy on file, and let your potential executor know who to contact in the event of your death.
Bottom line
Yes, putting a will together can be daunting. But it is an important legal document that can help your family and friends in the event of your death and eliminate money stress at a time that will already be emotional.
Take writing a will as seriously as you would when preparing any other legal document. Anything you do now can be helpful to those you care about after you’ve passed away.
Money tips that can work for everyone
No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.
Focus on paying off your debt. Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.
Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.
Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).
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