The purpose of estate tax planning is to maximize the assets you pass on to future generations by minimizing gift and estate taxes. Estate-tax strategies revolve around the use of irrevocable trusts. This article discusses the most common types of irrevocable trusts that are used to minimize gift and estate […]
When it comes to ensuring your assets are adequately protected, and that your wishes are honored after you’re gone, having a will is one of the most important steps you can take. But just as important as ensuring you have a will is knowing what should and shouldn’t be included in it. If you make mistakes in the drafting of your will, it could be considered invalid in a court of law, resulting in your assets being distributed in a way you may not have intended. Or, the will may be found to be valid but not produce the results you intend. To ensure that your wishes are honored after your passing, it is essential to know not only what should be in your will, but also what shouldn’t be.
A will is a legal document that outlines how you’d like your assets to be distributed after your death. It allows you to designate beneficiaries and guardians for your minor children. It’s also an essential tool for reducing the amount of taxes and administrative costs associated with estate planning.
When drafting a will, there are certain things that you should be very careful about including. So let’s consider what should not be put in a will and why. Here are some of the most important things to avoid (or at least be careful with) when drafting a will:
Including gifts to minors in a will can be problematic because minors are not legally able to accept gifts or enter into contracts directly. Minors also cannot directly own property until they reach the age of majority. Therefore, any gifts to minors must be either in trust or under the care of a custodian under the Uniform Transfers to Minors Act (UTMA).
Wills are legally binding, so you should ensure that the information in your will is correct. If incorrect information is included, it could lead to complications when the will is being administered. Mistakes will make it easier for people to challenge the validity of your will in general or of specific provisions in particular. It could also lead to delays in the distribution of assets or other complications in the distribution process.
Contingencies are conditions or situations that must be met before a bequest in a will can be fulfilled. Contingent language can provide flexibility, allowing your estate plan to adapt to changing circumstances. For example, a person may leave a legacy to a charity contingent upon the charity’s continued existence.
You can include contingencies in a will, but you have to be careful to make sure that those contingencies will be easily interpreted and enforced. For example, it would not be advisable to include the following language in your will: “I leave $100,000 to my daughter if she is a mature, responsible adult at the time of my passing.” The words “mature” and “responsible” do not have objective meanings, and including such language in your will may put your executors in an uncomfortable position. It is also not a good idea to condition bequests in ways that can be interpreted as discriminatory, as such conditions will not be enforced. For example, a bequest that only took effect if a beneficiary adopted a particular religion would not be enforceable.
Using imprecise language in a will can make it difficult to determine your true wishes, potentially leading to misinterpretations, disputes and disagreements. This can create a lot of confusion and cause delays in the distribution of the assets. Therefore, it is essential to use only clear, precise language in a will.
For practical reasons, including requests related to funeral arrangements in a will may not be the best idea. Funerals happen days after a person dies, but often by that point the heirs haven’t found or read the decedent’s will. It’s okay to include information about your funeral wishes in your will, but you should also find other ways to communicate your wishes to your loved ones.
Some assets may remain outside of a will for tax or other reasons. Here are some of them:
By avoiding these mistakes, you can ensure that your will is legally binding and that your wishes are honored after you’re gone.
Now that we’ve gone over what you should never put in your will, let’s go through some of the most important things to include in a will:
These are just some essential items to include in your will. Depending on your specific situation, there may be other things that you should include. For example, if you own a business, you may want to include instructions on how to dispose of your interest in that business.
In the United States, leaving property directly to a pet in a will is impossible. However, it is possible to leave money or property to a pet’s caretaker in a will, to be used for the pet’s care and upkeep. Sometimes, people create “pet trusts” for the benefit of their pets in order to ensure that their pets are taken care of after they’re gone.
If you have a relatively large estate, it may make sense to establish a revocable living trust, sometimes referred to simply as “revocable trusts.” Revocable trusts are will substitutes — meaning, they perform many of the same functions as a will. When a person dies with a will but no revocable living trust, their assets are generally subject to probate, which is a long, expensive legal process by which a court adjudicates the legal ownership of an individual’s property. Probate is a public process, so after your death, anyone can see what your will says. Revocable trusts can be beneficial for people who want to keep their assets private and avoid probate court. But even if you set up a revocable trust, you will still need a basic “pour-over” will directing that any assets not owned by the revocable trust at the time of your death be paid over to the revocable trust after your death.
Having a will is essential to estate planning, but it’s vital to ensure it’s drafted correctly, and you go through the list of what you should never put in your will, to avoid causing problems for your heirs. Make sure to include all the necessary information and avoid mistakes that could invalidate your will in a court of law. By keeping these tips in mind, you can ensure that your will is legally binding and that your wishes are honored after you’re gone.
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