Writing A Will? Avoid These Mistakes
A last will and testament is one of the most important documents you will ever create.
Its primary purpose is to explain how your personal assets will be allocated after you have passed away.
A will should also nominate an executor who is responsible for ensuring that your wishes are met and that any disputes are resolved.
Making mistakes when writing a will can lead to some devastating consequences including unexpected expenses or animosity between family members.
This guide will highlight a few common mistakes that people make when writing their will to help you avoid them.
Not updating your will when necessary
Most people experience significant changes to their financial circumstances over the course of their life.
This usually includes a substantial increase or decrease in their personal wealth as time goes on.
It is also common for individuals to continually change how their assets are structured and where their wealth is held.
You should regularly update your will to reflect any changes in your financial situation.
There might also be changes in your personal life which will require updates to your will, including getting remarried, having more children or a family member dying.
Forgetting about some of your assets
Individuals who have a lot of assets or complex asset structures may fail to distribute some assets in their will.
This might include possessions not located in the family home or business bank accounts which where forgotten about.
If you fail to nominate who should receive these assets, the executor must make a choice about how they are distributed.
If the beneficiaries of your will don’t like how these assets are handled, there may be legal action or animosity between family members.
Not creating a living will
In addition to describing how assets should be distributed after your death, wills should also include details of how your assets should be handled if you become incapacitated — which is called a living will, or a Lasting Power of Attorney.
A living will is used to inform your loved ones about your preferred end-of-life treatments, resuscitation preferences, and desired quality of life.
You can use a living will to make it clear to relatives that you don’t wish to remain in a vegetative state or to receive certain kinds of invasive treatments.
Unfortunately, many people forget to add these details to their will — potentially leading to conflict within the family as your loved ones argue about your wishes.
Not including your business assets
Your business may be your most valuable asset, so it is important to include it in your will.
You may also have explicit wishes about how it should be handled after you pass away.
Do you want the business to be sold and the profits divided between family members?
Do you want a specific family member to continue running the business?
What happens if that family member does not wish to run the business?
It is important to be very clear about how business assets will be distributed.
Failing to factor in your debts
Debts can take a large chunk out of your estate after death.
You should consider how these debts will be paid and how it will affect the value of your different types of assets.
For example, if you have £50,000 in loans, a home worth £100,000 and £100,000 in the bank — your executor may pay the loans off with the cash.
If you have left one child the home and another child the cash, there will be an inequitable allocation of assets.
Writing your will by hand
While it is possible to write your will by hand and have it accepted as a legitimate legal document, it is generally not a good idea.
Some governments will place restrictions on how many times a written will can be amended and there is more potential for multiple written wills on various scraps of paper to be in conflict with one another.
You are also less likely to have your written will correctly witnessed, which can lead to conflict.
Writing a will without considering tax ramifications
If you write a will without consulting an accountant or lawyer, you will be more likely to mistakenly distribute assets in a way that triggers additional tax payments to the government.
Consulting with a professional will help you identify ways to reduce or eliminate the taxation burden faced by the beneficiaries listed in your will.
Choosing the wrong executor
The executor of a will is responsible for paying any outstanding debts and dividing the remaining assets between beneficiaries.
It is important to choose someone who is level headed and trustworthy.
Your executor should also be organised and capable of treating all beneficiaries fairly.
Many people mistakenly choose someone to be their executor simply because they are a close friend or member of the family.
Even though they were a great friend to you during your life, they may not have the skills or demeanour necessary to execute your will correctly.
Forgetting to name a guardian
If you have children under the age of 18, you will need to name a legal guardian in your will.
The legal guardian is a person or persons who will be legally and financially responsible for your children if you pass away.
If you do not name a guardian, there may be a dispute within your family about who should take your children.
Not understanding the value of assets
It is a common mistake for people to write a will without correctly understanding the value of their assets.
If you have assets like jewellery, art, antique furniture, stamp collections, or collectible cars, it is important to have them valued before you allocate them within your will.
This will ensure that all beneficiaries receive an equitable split of your assets.