Having a last will and testament helps ensure that your wishes regarding your trusts and assets distribution are honored after death. But even though you may think you have everything in place, you should take a careful look at several of the following common errors made in a last will so you may avoid them.
Overlooking Estate Taxes
When you write your last will, you must not exclude estate tax planning. The Internal Revenue Service and your state taxation division tax estate planning distributions, and if you don’t take them into consideration your beneficiaries may face steep penalties. Federal and state taxation laws change often, so even though you have already made up a last will and testament, seeking the counsel of a skilled estate attorney can help you avoid estate tax planning blunders that will cost you later. Life insurance payouts, trusts and retirement products might need to be included in your estate to satisfy IRS and state requirements.
Forgetting to Update Your Will
Once a will and last testament is created, be sure to update it after major life events.
Life can change in a flash. Divorce, childbirth, an inheritance – these events can ruin a good estate planning effort if you don’t update your last will and testament to include these changes into account. Too often, estate planning oversights lead to unintended consequences, such as unplanned bequests and serious complications, which can affect loved ones for a long time. We cannot emphasize it enough that if you overlook assigning a guardian to care for your minor child in the event of an untimely tragedy, serious long-term complications can and will arise.
Omitting “What If” Provisions
As you create your assets and beneficiaries lists, be sure to include provisions. “What if” provisions create a backup plan in the event that your first choice isn’t possible, such as when a named beneficiary dies before inheriting an asset. By including a residuary clause that names a secondary beneficiary you protect your assets from your state deciding for you.