Most people think a will just involves who gets what, and that’s exactly why they get the small stuff wrong. Taxes & paperwork are just some of the boxes people never think to check until it’s too late. As such, here are ten crucial details you don’t want to forget when you write a will. What’s the one thing you’d be most likely to forget?
Featured Image Credit: Shutterstock.
Add a residuary clause
You might leave gifts for a few people, but forget about the random stuff, like an old savings bond or a car you never mentioned. That’s where a residuary clause comes in handy. Without one, those leftovers won’t automatically pass on, so make sure you include it. Just a short sentence like “all remaining property goes to X” stops anything from falling through the cracks.
Make beneficiary forms match what your will says
Sure, your will might say your spouse gets your IRA. Yet your account might still list your college roommate, and the bank will follow that form, overriding your will completely. That’s why you should double-check every retirement account & life insurance policy, even your bank accounts. You don’t want your will to be ignored entirely.
Authorize access to your digital life under state law
Streaming accounts and your crypto wallets aren’t automatically available to your executor. However, most states have laws that allow you to grant that access in writing, so make sure that you do. Why? Because not doing so could mean that your loved ones are permanently locked out of important accounts.
Name backup guardians and a conservator for kids’ money
While most parents usually remember to name a guardian, most of them forget to include backups. And money management for kids doesn’t always go to the same person raising them. In a will, you can name someone to care for the child, as well as someone else to handle money. Not doing so forces the court to make the call.
Handle real estate outside your home state ahead of time
Owning a cabin in another state may involve having to go through a separate probate case over there. That slows everything down. But thankfully, there’s a simple fix, which is to transfer the place into a trust or use a transfer-on-death deed in any states that offer them. Otherwise, your executor may be dealing with two courts instead of one, which is extra work you really don’t want to give them.
Spell out executor powers and compensation
Weirdly, executors don’t automatically get the right to sell your house or car. They may not even be able to deal with insurance claims. But you can give them that authority directly in the will, and you can also state whether they need to post a bond or if you’d rather waive it. Also, don’t forget to mention how they’ll get paid.
Set a tax apportionment rule
Estate taxes don’t always go as you might think. State law has default rules, which could mean beneficiaries are forced to pay for things in ways you never planned, while a short clause in your will or trust will say who’s responsible. Retirement accounts pass tax directly to whoever inherits them.
Address assisted reproduction & posthumous children
Modern family planning also leads to legal timing issues, as many states only count a child born after your death when you’ve put written consent in place. The baby will also need to arrive within a set period, sometimes measured in months. To get those children included in your definition of “descendants,” spell it out, or else the state rules will decide.
State where the original will lives & avoid locked bank boxes
Courts want the signed original of your will. A copy isn’t good enough. As such, your executor may need court orders just to get the original if you’ve put it into a bank safe-deposit box. Some states let someone open the box with a death certificate. But even that can be messy.
Spell out what happens to loans & lifetime advances
Unfortunately, any money you loaned out doesn’t just vanish when you die, so you’ll need to cancel it in writing. Not doing so will ensure that the loan is treated like any other estate asset, and advances are another issue. You’ll need to make it clear in writing whether you gave someone funds you want counted against their share.
Like our content? Be sure to follow us.
