Effective estate planning can seem straightforward, until you take into consideration that people and life in general can be very unpredictable. Add to that the tremendous changes that can occur in a family in even so small an amount of time as a year, and the complexities begin to reveal themselves. Below are some specific mistakes that can be made in writing a last will:
1) No Plan at All.
The worst mistake a person can make is to not create a last will at all under the assumption that it won’t be needed. This is like designating your family to perform triple bypass surgery in the event that you should suffer from heart failure. In short, the will is NOT just for your peace of mind, but to lessen the burden of your death on those who are close to you. The best last wills are those that are uniquely tailored to your family, and your assets. Employing a Massachusetts estate planning lawyer for just a few hours goes a long way.
2) Leaving No Liquidity for Probating the Last Will.
Many times a person will write a last will that simply gives away properties and assets without setting aside an appropriate amount of funds for the property’s administration. How much should you set aside? Probably a lot more than you think. State and federal estate taxes, income taxes, payment of debts and rents, family business expenses, and the cost of the probate process itself are just a few common examples. An experienced practitioner could plan for these expenses in an hour, but the layperson would need significantly greater time.
3) Choosing the Wrong Personal Representative for your Last Will
The natural choice for the executor of your will is someone whom you trust a great deal, and is capable of making responsible decisions. This is because the executor will need to collect all of your assets, pay all of the necessary debts and obligations, and distribute to beneficiaries. While these sound like simple tasks, they are actually huge and time-consuming responsibilities. What is worse, the executor often must do this for free! Make sure that the executor you choose is someone who will have the time and resources available to handle your estate.
4) Relying on Jointly-Held Property for Asset Distribution
When property is held jointly there are very high potential federal and state tax consequences that can severely affect the intended beneficiary’s interest, especially out of wedlock. But most importantly, the surviving spouse is neither bound to nor protected by a last will. This means there is no management protection for making strategic decisions on the other fees in the estate, the survivor can give the property to whomever he or she wants, and the property may be taxed twice at extremely high rates.
5) Leaving Everything to a Spouse in the Last Will.
Even within a marriage, despite the “unlimited marital deduction” whereby all property passes tax free to your spouse upon death, it is not advisable to simply leave everything to one’s husband or wife. If the last will leaves a business or investment portfolio, for example, the surviving spouse may not have the right knowledge to manage or sell such assets. An experienced estate law practitioner will explain in greater detail how this affects your particular estate, but just know that your marital deduction is gone when both spouses pass away.
Read the second part on How to Write a Last Will