The goal of estate planning is to provide clear instructions, limit conflict and establish a meaningful personal legacy. Wills play a critical role in modern estate planning. For some people, a will is the only document they draft.
Even those with robust estate plans need to take care to ensure they don’t make common mistakes when drafting or updating a will. Some assets are known as “silent killers” because they undermine the effectiveness of an estate plan by providing instructions personal representatives cannot follow and creating unreasonable expectations among beneficiaries.
Those who create comprehensive estate plans that involve more than just simple wills generally need to check their documents carefully to avoid the inclusion of assets that do not belong. What resources can create probate complications if added to a will?
1. Assets with beneficiary designations
Life insurance companies and financial institutions often allow individuals to file beneficiary designations. The paperwork submitted to an insurance company or bank determines who should inherit control of an account or who receives the payout for a life insurance policy. People sometimes make the mistake of including these resources in their wills and then update their wills but not their beneficiary designations, leading to disputes about those assets later.
2. Assets that transfer to survivors
Real estate holdings, such as people’s residences, require title documents to establish ownership. Many people intentionally hold title to their most valuable resources with their spouses or significant others. If people hold title as joint tenants with rights of survivorship or establish tenancy by the entirety, the surviving party living at the property has the right to inherit the deceased party’s interest in the property without it passing through probate court first.
3. Assets transferred to a trust
Property used to fund a trust no longer belongs to the grantor establishing the trust but instead is now the property of the trust. As such, a will cannot designate terms for the distribution of those resources.
Those updating or reviewing their wills may benefit from ensuring that they have not included assets that belong to a trust, have beneficiary designations attached or transfer automatically due to survivorship rights. Working with an experienced estate planning attorney can help people avoid these and other common estate planning mistakes that could diminish what beneficiaries inherit and lead to confusion during estate administration.