COMMON MISTAKES WHEN MAKING A WILL
Having a well-written Will is essential if after you die you want to dispose of your property according to your wishes. A Will is a document that provides detailed instructions as to the disposition of your property. A will also makes it more likely that the probate process will unfold in a smooth and efficient manner, saving your loved ones the time, money, and difficultly of a prolonged or contentious probate process. Mistakes in making and executing a will, however, can defeat those wishes. The following are five common mistakes when making a will.
NOT HAVING A WILL IN THE FIRST PLACE
Not having a will is technically not a mistake when making a will, but it is the biggest mistake when it comes to planning your estate. If you die Intestate (i.e. without a valid will), your property will be distributed according to the state’s default scheme of distribution. In other words, the state will determine who will inherit your property. In Florida, the default scheme is called Per Stirpes.
If under Per Stirpes, your intended beneficiaries are still entitled to inherit the same, the absence of a valid will might still force your heirs to spend large amounts of time and money in order to probate your estate. This, of course, would depend on the complexity of your estate and the particular circumstances. Some of the cost that may be incurred or increased for lack of a will or estate plan, may include attorney fees, court costs, estate administration costs, and higher taxes.
Another common mistake is sloppy drafting, such as overlooking Ambiguous language in the will. Ambiguity occurs when a word or phrase is unclear or can be interpreted in different ways. Avoiding ambiguities requires not only analytical precision, but also the ability to draw from a repository of mistakes made by others in order to spot various mistakes and potential problems.
A common example of a will ambiguity is a provision such as “to John and Sarah.” If John predeceases Sarah, a court may consider the assumption that the testator otherwise intended “to John” to put words into the testator’s mouth. Consequently, the devise may fail and be distributed Per Stirpes.
The importance of crafting language in a legal document carefully is further illustrated by an old joke, told by the comedian Alan King:
"The other day my house caught fire. My lawyer said, 'Shouldn't be a problem. What kind of coverage do you have?' I said, 'Fire and theft.' The Lawyer frowned. ''Uh oh. Wrong kind. Should be fire OR theft.'
The joke makes a noteworthy point, but a comedian is of course not an attorney. A Fire and Theft insurance contract would draw on a different case law and usually contain provisions that would make it clear that the contact did not cover only occurrences of both fire and theft. A will, on the other hand, is primarily about the testator’s intent. Absent other evidence clarifying the ambiguity by clear and convincing evidence, an ambiguity may undermine the testator’s actual intent.
LEAVING EVERYTHING IN A WILL
If you dispose of all of your assets in a will, depending on the size and nature of your estate and taxable income, you may not be taking advantage of the full range of estate planning. For example, the IRS allows you to make tax-free gifts of up to $13,000 a year and per person.
If like most people, you do not want to just start handing out checks, or have other privacy concerns, one option is to devise those gifts through certain kinds of trusts. Doing so, can allow you to avoid taxes now and also later. Aside from non-testamentary trusts, there are various kinds of so-called will-substitutes.
Will substitutes also have the advantage of avoiding the probate process, allowing you to devise your property to your intended beneficiaries without the intervention of a court. Will substitutes such as insurance policies, retirement accounts, personal accounts, non-testamentary trusts, are various. They also have different pros and cons, depending on your particular goals and circumstances.
NOT CREATING A LIVING WILL
In your will, you can also include a Living Will. A Living Will is a document that states your medical preferences in case you have a medical emergency or otherwise become incapacitated. A living will can address topics such as medical procedures you object to, life support, and pain management.
Additionally, you can also create advanced medical or healthcare directives or proxies. These go under various names. They can include a power of attorney, which allows you to appoint a person to make decisions for you in case you are ever unable to do so. This has the advantage of not only choosing who such a person will be, and their possible successor if they are unavailable when needed, but also avoiding the possibility of litigation if there is a disagreement.
NOT UPDATING YOUR WILL
Some people hire an attorney to draft a will, trust, or other estate documents, but then forget to keep their plan up to date. Estate plans not reviewed periodically or updated for events such as significant changes in law, or significant personal events, may no longer reflect your wishes or still achieve your objectives.
Attorneys usually prescribe an annual review, but how often really depends on the nature of your estate, among other factors. A more complex estate may need to be reviewed more often. The simple answer is that you should consult an attorney who is familiar with your estate and documents.
Some of the changes that may call for an update of your estate plan are changes in the law; changes in your family, such as birth, death, or marriage; changes in your health or your finances; or other changes in your personal circumstances or objectives.
While contemplating your mortality can be unpleasant. Along with the peace and security that accompanies knowing your affairs are in order and that your loved ones will be taken care of, it might also help put matters into perspective. Either way, the best way to ensure that your property will ultimately be disposed of according to your wishes is to have a will or more elaborate estate plan that is well informed, well considered, well written, and kept up to date for changes that may adversely affect your plan.
*This Blog is current as July 28, 2020.
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