Most people understand the importance of writing a will. If you die without one, your state’s “intestacy” laws determine who inherits your assets and in what proportion.…and that may not align with your wishes.
Top estate-planning attorney Peggy Hoyt, JD, says it’s just as crucial to avoid mistakes when writing a will. Reason: A probate court in your state must verify that the will is your true last testament. Even a small technical error can lead to protracted legal battles, months or years of uncertainty and confusion for your family, and even invalidation of your entire will.
What’s more, the probate court provides the final ruling on the division and distribution of assets to beneficiaries. It has the right to revise your will to correct mistakes and resolve conflicting provisions, ambiguous choices and vague language. Result: Your intentions for who gets an inheritance and how much may be altered.
Bottom Line Personal asked Peggy Hoyt to explain the most common—and avoidable—mistakes that can compromise a will…
- Not executing the signature correctly.
- Omitting the names of a person you wish to disinherit.
- Making unreasonable conditional bequests.
- Specifying dollar amounts rather than percentage amounts.
- Including sensitive financial information.
- Thinking you don’t need a will because your estate is simple.
- Failing to update your will if anything significant changes.
- Naming multiple executors.
- Not recording your will on a printed paper document.
How to Set Up a Will
Whether you write a will using do-it-yourself software downloaded from the Internet or you have an attorney craft one for you, it’s easy to make errors because each state has its own specific laws and procedures regarding wills and probate…and many people will make choices or use language that inadvertently creates outcomes they don’t want.
Mistake: Not executing the signature of your will correctly
This seems straightforward. For the will to be valid, you typically are required to have two disinterested witnesses (not beneficiaries of the will) sign the document, with you in attendance. But depending on where you live there can be additional requirements. Examples: Louisiana has a mystic will in which the contents are kept secret until probate and requires three signatures…Louisiana is the only state that requires a will to be notarized when it is signed…in Illinois, remote witnessing of a will on a video call is allowed.
Mistake: Omitting the name of a person you wish to disinherit
If you choose to leave nothing to, say, an adult child, you should directly name the child in your will and state that it is your specific intent that he/she shall receive no part of your estate. Otherwise, a court could assume the exclusion was unintentional and even award a share of your estate to the adult child who was not named. Important: You do not have to—and should not—explain the reasons you are disinheriting this person. Making disparaging disinheritance statements in your will not only encourages slighted family members to contest it, but if the statements are factually untrue, the disinherited person could claim you wrote them out under duress or undue influence.
Mistake: Making unreasonable conditional bequests
In many states, you are allowed to list specific conditions that a beneficiary must meet to receive an inheritance. Example: You could leave your grandchild an inheritance contingent on his/her getting a college education. But these conditions must be reasonable, clearly defined and possible to fulfill. Your conditions also are required to be lawful and not violate public policy by severely interfering with a beneficiary’s personal-life choices, such as requiring a child to marry a particular person to receive his inheritance.
Mistake: Leaving specific dollar amounts in your will rather than percentage amounts
Assigning assets in shares or percentages to your beneficiaries allows your estate to avoided unintended consequences and flexibly adapt to changing circumstances such as when your estate value turns out to be smaller than expected. Example: You have a $500,000 estate. In your will, you leave $100,000 to a charity and the remainder in equal shares to your two children. If your estate’s value drops and is worth only $100,000 in distributable assets at the time of your death, your children likely will get nothing after the charity receives its distribution.
Mistake: Including sensitive financial information in your will.
Examples include bank and brokerage account numbers…passwords…login credentials for online accounts…or your Social Security number. While not having this data readily available can cause aggravation and complications for an executor and your family, a will is not the place for it. Reason: Wills are public-record documents that heirs and the court can view, but unauthorized individuals could potentially use the information to gain access to your financial accounts. Better: Leave a separate document for your will’s executor that contains your financial information. This document does not have to be filed with the court. All relevant documents should be kept together in a safe but accessible place—not locked up where they cannot be found or easily retrieved.
Mistake: Thinking you don’t need a will because your estate is simple
Nearly 40% of adults without a will put it off because they think they don’t have enough assets to warrant one or all their assets are in 401(k)s or IRAs, which have their own beneficiary-designation forms that supersede wills and are not included in probate. Reality: There is no such thing as a simple estate. It’s not the just the amount or value of an estate that determines the need for a will. You need to appoint an executor to navigate handling taxes, paying creditors and resolving administrative issues, and perhaps even name heirs to inherit potential assets. Example: You perish in an accident due to someone’s gross negligence. Your estate can file a wrongful death lawsuit…but if you don’t have a will, state law decides how and to whom any money that your estate is awarded is distributed.
Mistake: Failing to update your will if any of the three “Ls” change
Outdated wills can contain provisions that no longer make sense, contradict or fail to take advantage of current laws or can result in unintended bequests. Review your will if there are…
Life changes such as births, divorces, marriages or a major property transfer such as selling your home. Also, if your assets dramatically increase or decrease, you may want to add beneficiaries or reallocate the distribution of assets.
Law changes. New Federal tax laws could mean that you have to reconsider your bequests to achieve the most beneficial tax considerations for yourself and your heirs. Also, if you move to a new state, your will remains legally valid, but the will provisions created in your previous state may not lead to an optimal outcome based on your new state’s estate laws. Example: There are big differences from state to state in the inheritance rights of spouses and minor children.
Legacy changes. Example: A new charity has become very important to you, and you want to make a bequest.
Mistake: Naming multiple executors
Many parents, hoping to avoid the appearance of favoritism and promote family cohesiveness, name all their children as co-executors. This can lead to problems, especially if the children haven’t been able to work together successfully in the past. Since consensus is required on even small decisions, bickering executors can mean long delays in executing the provisions of the will. Best: Pick the child most capable of carrying out the intentions of the will and handling the estate. This includes the ability to deal with attorneys, accountants, creditors and appraisers.
Mistake: Not recording your will on a printed paper document
That’s the gold standard for what counts as a will. Any other format raises the danger that they will be contested or invalidated in probate court. Example: Only about half of all states recognize handwritten wills (also known as “holographic” or “olographic testament”). About a dozen states including Arizona, Florida and Indiana recognize electronic or “e-wills, which are created and stored digitally but still need to be copies of printed paper documents. Finally, no state accepts a digital recording or selfie video you make on your smartphone as a valid will.
