Drafting a will ensures that your wishes with regards to your assets and estate are followed. There are common mistakes that many people make when drafting wills. Read on to learn what pitfalls you need to avoid when making your will. Make sure to talk with your lawyer when you make these changes.
Update Your Will
Many people do not take the time to update their will when they experience significant life changes. You need to update your will when you go through a divorce, when a new child is born, when you start a new business or when you acquire new assets. Failure to update your will can lead to disputes among your beneficiaries and many unintended bequests. It is also important to nominate guardians for your children in case they are left without parents.
Include your Intended Beneficiaries
This mistake occurs when you fail to update your last will by including a new beneficiary. Furthermore, when you leave someone out of your will (a person who has a right to your estate), or distribute your assets unusually, you need to state your reasons to avoid challenges or disputes when you pass away. It is also worth noting that in some jurisdictions, witnesses are not allowed to benefit from wills, therefore you should have witnesses whom you have not named in your will.
Remember Your Taxes
Many people make the mistake of assuming that their estates are not affected by the estate taxation system. Even if one your properties is not part of your estate, your estate may still be taxable. When drafting your will, make sure you account for estate taxes. It is advisable to consult your lawyer to determine what assets are taxable. Some of the assets that are usually taxed include retirement plans, trusts and life insurance benefits.
Hire a Proper Executor
An executor manages your estate on your behalf by ensuring that all your creditors and expenses are settled and your estate is distributed to your beneficiaries accordingly. If you find that your executor is no longer fit to execute their duties e.g. because he/she has moved to another country or does not have sound mind, you should find another executor.
Dispose of Everything
Take an accurate inventory of your assets and distribute all of them according to your wishes. It is also advisable to provide what-if provisions in case a beneficiary is not able to claim his/her inheritance (e.g. the death of a beneficiary).
Include a residuary clause or leftover clause in your will to make sure the assets that are left over after all the items you have mentioned are distributed, go to your beneficiaries. If you have left over property that was not included in the will or have died without a will (intestate), the laws in your jurisdiction will decide how the property will be distributed