A last will and testament is a foundational estate planning tool. Its primary purpose is to direct where your asset go at your death. The circumstances at the time you execute your will dictate how your estate will be divided. However, circumstances change. As a result of the stress and demands of everyday life, many fail to keep their will current when life changes. Consequently, unintentional mistakes are made. These mistakes can render the will useless or make probate more difficult. You don't want that. And your beneficiaries don't want that.
It's always in your best interest to seek the assistance of a skilled Tennessee will lawyer to help you draft and maintain your will. However, there are certain mistakes you can make regardless of whether you have an attorney assisting you. Here's what they are:
Mistake No. 1: Leaving a Will As-Is Even as Your Life Changes
Life changes. Five years from now your life will look different than it is now. Ten years from now, it could appear drastically different. Obviously, not every life change requires a modification to your will, but major changes at least demand some consideration as to altering your estate plan. But for so many people, they create a will and then that's it – they rarely consider modifying the will to make updates as needed. Certain changes in life that may present a good time to update a will include, but are not limited to the following:
- a marriage
- a divorce
- a death
- the birth of a child or grandchild
- a big purchase
- a new business
- change in financial circumstances.
When you fail to review your will after a major life change, time can slip by and potentially leave your estate in a mess if something unexpectedly should happen to you.
Mistake No. 2: Failing to Appoint an Appropriate Executor
The executor of your estate will be carrying out your last wishes – that is a big responsibility. Who you choose as the executor can make a difference in how smooth the probate will proceed and how timely and efficiently property and assets are distributed to your heirs. You need to make sure the person you choose as executor is up to serving and can handle all the tasks required.
Mistake No. 3: Failing to Disclose all Appropriate Assets
Most assets and property should be disclosed in your will or on a separate financial statement that your executor can easily find. This disclosure is important for two reasons: 1) It's important to make sure that your wishes are precisely followed, and 2) It makes your executor's job much easier. If your executor has to search through a jumble of old bills, receipts, and bank statements, it will take him a while to discover all your assets. Chances are you have more than one bank account. You may have multiple life insurance policies. Without making such a disclosure in your will or on a separate financial statement, it makes your executor's job much more difficult. Do your executor a favor: Make sure your assets are easily identifiable.
Mistake No. 4: Failing to Consider & Provide for Taxes
Many of you assume that your estate not worth enough to be worried about the federal estate tax. That may be true. But keep in mind the 100% tax. This tax is not a governmental tax, but it is very real. The 100% tax comes into play when divorces and premature deaths rob potential heirs of their portion of your estate. Take a moment to read more about this tax here.
Moreover, even though you may not seem to have an estate tax problem, be aware that property not necessarily included in your estate can qualify for the estate tax system. Those assets can add up quickly. Assets like:
- life insurance proceeds;
- trusts; and/or
- retirement plans
can be included in an estate for tax purposes.
The Key Takeaway
A last will and testament is meant to help you plan your estate so that when you die, your beneficiaries are provided for in accordance with your wishes. You worked hard for the assets and property you have acquired, so it should be up to you what happens to those assets in the long-term. A mistake, however, can undo everything you worked hard to put together. Hire an experienced estate planning attorney to help you prepare and maintain your Tennessee will and to help you avoid one of these common mistakes.