5 Things You Should Never Put in Your Will
While nobody likes to think about why creating your will has a final due date, making plans for your estate and related legal documents makes it more likely your loved ones will be able to handle everything smoothly after your death and follow your wishes.
“When doing estate planning, what you leave out of your last will and testament is just as important as what you put in it. Putting the wrong items in a will can cause delays and legal headaches,” said Jody M. Butts, an estate planning attorney at Stephenson Rife.
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That being said, writing a will is not as simple as just slapping together a list of dos and don’ts. There are some things you should not put in your will, and here are five of them from experts.
1. Accounts With Designated Beneficiaries
Assets such as bank accounts, retirement accounts and life insurance generally have a beneficiary designation and should be left out. For example, if you are a high-net-worth individual with a taxable estate, it would not be wise to pass your life insurance policy through your will because you could forfeit up to half of it or a large percentage of it to estate taxes.
“Your 401(k), IRA, life insurance policies, and POD accounts bypass probate entirely and generally should not be addressed in your will. The beneficiary forms you fill out with your bank or insurance provider override whatever is written in your will,” said Butts.
2. Business Interests for an Active Business
Don't transfer business interests in your will, particularly a running business, because it will be very difficult for that business to function while your estate is being settled without an effective succession plan.
“Listing business interests in your will may conflict with existing buy-sell agreements, operating agreements or other legal documents, leading to disputes among business partners or beneficiaries,” said Butts.
3. Funeral and Burial Wishes
Although it may seem logical to include your funeral and burial preferences in your will, it's not the most practical approach, as wills are often read after funeral arrangements have been made, making it too late for them to be read in time. Plus a little awkward for your family members and loved ones who may have missed the mark.
According to Butts, “Typically, wills are read weeks after a funeral occurs, so inclusion of funeral wishes solely in a will may result in not adhering to your stated desires. Share your final wishes directly with loved ones or outline them in a separate funeral planning declaration or healthcare proxy.”
4. Inheritance for Pets
As much as everyone loves their pets, and it would make for a great movie, animals can’t really, or practically, inherit assets.
Butts said, “Legally, pets cannot own property because they are considered personal property. If you leave money or other property directly to your pet in your will, that clause will be invalid. Instead, name a trusted caretaker and set up a pet trust to fund their care.”
5. Conditions on Inheritances
Avoid attaching conditions to gifts in your will, because even though you have specific desires, imposing too many restrictions can complicate matters and potentially lead to disputes among beneficiaries. It's better to express your intentions through conversations, trusts, or other legal documents.
“You cannot use your will to control people from beyond the grave. Conditions that force someone to get a divorce, change religions, or break the law will be deemed invalid by a court,” said Butts.
Jordan Rosenfeld contributed to the reporting for this article.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.