Although writing a will is typically not complicated, it is easy to make some simple mistakes that can have significant consequences. One of the biggest mistakes is including unexpected provisions in the will.
Unexpected arrangements in an estate plan can lead to issues and disputes, depending on the relationships between heirs and their expectations. Heirs may be left wondering what the deceased was thinking when drafting the will.
One potential issue that heirs may face is how to distribute assets among children and grandchildren. If a will has not been updated for many years, some individuals may be unintentionally omitted while others who should not be included, such as ex-spouses, may still be listed.
Simply stating in a will that assets will be divided equally among children is not always a good idea. If a child predeceases you, it could lead to complications where their surviving spouse and children may not receive any inheritance, while the remaining siblings may end up with more.
If there are stepchildren, unless they have been formally adopted, they can be automatically excluded without specific wording in the will. If you wish for stepchildren to receive a portion of your estate after your passing, you must explicitly name them in the will or any other estate planning documents. According to the Legal-Info website, stepchildren do not have inheritance rights under the law.
If a child’s spouse wants to control the family finances and the child passes away, the inheritance left for that child may not benefit their grandchildren.
Failing to set up a trust for disabled children can leave them unprepared. According to MoneyDoneRight, passing on assets to disabled children through a simple will may disqualify them from government financial aid until they deplete the inheritance below poverty levels to qualify for these benefits again.
Placing funds into a Special Needs Trust can prevent the loss of government benefits. These funds are managed by a trustee and distributed according to the terms specified by the grantor.
The sudden appearance of unknown heirs can trigger conflicts. If someone emerges claiming to be an heir, and the other heirs have no knowledge of this individual, it can come as a surprise to all involved. This person may demand equal distribution or even more inheritance, leading to prolonged delays in estate distribution.
It is common practice to notify beneficiaries when they are included in a will and provide them with a copy. If you expect to be included but do not receive notification, you can find relevant information online after the will has been submitted for probate.
You may also receive notification during the probate process. In cases where there is no will, the court will determine the estate’s beneficiaries. Additionally, certain assets, such as bank accounts or life insurance, can designate beneficiaries directly without the need for a will.
If someone is disinherited without explanation, they may feel it’s unfair and challenge the will. This is especially common in cases involving significant estates. Without a valid explanation, this omission may be seen as negligence.
To prevent such disputes, including a “no-contest clause” in the estate plan can deter challenges. This provision stipulates that if someone contests the will and fails, they will forfeit any inheritance. Generally, this clause can prevent will challenges, but it may not be enforceable in certain states.
If a will only states assets will be equally divided among children and one child spends recklessly, it can create issues. Establishing a Living Trust to hold that child’s share can help preserve these funds for longer. The trust can specify conditions for distribution, such as meeting certain requirements or reaching a specific age to receive the funds gradually.
Heirs who discover a significant portion of the estate must be used to pay estate taxes may be disappointed. Failing to take measures to reduce estate taxes in advance can result in the government claiming more taxes than anticipated.
States may impose inheritance taxes in addition to estate taxes. Money held in trusts and proceeds from life insurance typically do not incur taxes and can be distributed faster without probate. Designating beneficiaries on policies can help avoid tax issues related to life insurance.
Gifting assets to heirs before death can provide immediate benefits to them and reduce the overall estate amount.
In 2024, individuals could gift up to $18,000 per year (increased to $19,000 in 2025) without the recipients incurring taxes, as noted by Investopedia. Couples can jointly gift $36,000 annually, and payments directly to educational or medical institutions for fees are not considered gifts, avoiding the need to report to the IRS.
Not everyone has the right to challenge a will. If the will document does not comply with state laws, it may be deemed invalid. Additionally, if the testator had mental issues at the time of signing the will, others may contest it on grounds of incapacity. LegalZoom notes that the testator does not need to be entirely without cognitive issues but must understand the estate being distributed and who the beneficiaries are.
If someone deceives you or you are under pressure, known as “undue influence,” to sign a will, it can be grounds for challenging the will.
To prevent surprises in a will, it is advisable to communicate with heirs about the estate plan without revealing specific amounts but letting them know they are included in the will.
Seeking advice from a professional lawyer for estate planning is also recommended.