Taking the time to put together a will is a major step. The will is a legal tool that will guide loved ones in the event of death, helping them as they navigate the legalities that come with transferring an estate. It will provide the instructions for who gets what and meet this legal role, but it serves as more than that. It also provides peace of mind as loved ones will have the comfort that comes with knowing their decisions are guided by your wishes.
Before you begin putting together a will it is helpful to know what not to do. Three of the biggest mistakes that cause problems with a will include:
#1: Choosing the wrong person to serve as the executor
The creator of the will, known as the testator, chooses an individual to represent and guide the probate process and distribution of assets as named in the will. It is important to chose someone that will act with integrity, not self interest, during this process. It can be a family member, friend, or a professional.
#2: Failing to update the will
It is a good idea to review the document every couple of years or after any major life event. This can include marriages, divorces, births, and deaths in the family. Any changes to the structure of the family will likely translate to a need to change heirs named in the will.
#3: Not considering a trust
A trust is not right for every estate but for some it can provide numerous benefits. A trust is a legal tool that takes a more advanced role in the distribution of assets when compared to a will. The creator transfers assets into the trust and a trustee, a named individual, distributes the assets as instructed by the trust documents. It is different from a will because the trust almost acts like an account — a tool to house and protect assets from others. Depending on the language used to create the trust this can mean creditors cannot go after the assets. A trust can also reduce the estate’s tax obligations.
It is important to consider this tool during initial estate planning conversations to help better ensure the estate plan meets your needs.
