When estate planning, there are various assets that you should never put in your will. If you include them, you risk causing conflict and confusion for your loved ones and potentially long and frustrating delays.
Your last will and testament will be the foundation of your estate plan and will retain your wishes after your time on earth is up. You must ensure that you don’t make any costly mistakes at this point, as the will needs to meet the high standards for being proved in a court of law.
Our Florida estate planning attorneys have put together this guide to help you avoid making crucial mistakes:
Assets You Shouldn’t Put in a Will
Assets That Pass Outside of Probate
Certain assets can pass directly to your beneficiaries (such as your spouse and kids) outside of the will – and outside of probate. If you include these assets and types of property in your will, you risk causing great confusion when your estate is handled after your death.
Read Related: What Is Probate and Why Should You Avoid It?
Property With a Right of Survivorship
Property that comes with the ‘right of survivorship’ is property that you own with someone else. When you die, your ownership share will be automatically taken by the surviving co-owner, such as a spouse.
If you name someone else in your will for this property, then the ownership’s future will be determined by whether you or the co-owner dies first.
Common types of property owned with right of survivorship include ‘Joint Tenancy’ and ‘Tenancy by the Entirety’.
Trusts are separate entities that can hold ownership of assets. They can be used to distribute assets and wealth to minimize taxes and allow for greater control over distribution rather than direct inheritance.
As a trust is independent, you don’t need to mention it in your will. A trust will allow assets to pass automatically without the need for probate. So if you mention it in a will, you’ll cause confusion and pointless delays.
Read related: A guide to different types of trusts
Assets with Named Beneficiaries
Many assets will have pre-named beneficiaries. These are paid out or distributed typically immediately after the notification of death, so there’s no use for them in a will. Common examples include payable or transferable-on-death financial accounts or assets such as:
- Bank accounts
- Brokerage or investment accounts
- Retirement accounts and pension plans
- A life insurance policy.
You should add a beneficiary to these accounts directly and not rely on a will. You should also keep your beneficiary designations updated. Big life events such as marriages, divorces, new minor children or grandchildren are wise moments to reassess.
You will need to contact the relevant company, such as the life insurance company, bank provider or account administrator, to change the beneficiaries.
In your will, you can choose exactly who you want to receive your personal property and assets. For example, you can say, ‘my son Dave should receive my car’.
But you can’t start adding conditions in a will. For example, you can’t put ‘Dave should only receive the car if he promises not to sell it for 5 years’ or ‘Only if he uses it for school’.
There’s no way to enforce such terms legally, so adding them could prevent the designated beneficiary from getting their hands on it at all.
If you want to include conditions and terms, you would be advised to consider a trust. Trusts can allow you to include terms that must be met before the individual receives an asset. They are also overseen by a Trustee, allowing for flexibility and further control.
While business interests can be included in a will, it may not be wise.
As previously mentioned, wills must pass through probate. That probate process can be long, stressful and contested. Business doesn’t usually have time to wait for such delays and it can also cause headaches for business partners.
Instead, you should speak to an estate planning lawyer who can help you set up a better system for the succession of your business – including reducing the impact of taxes.
Any Assets You Don’t Want to Pass Probate.
If there are assets you want to pass quickly to your loved ones without the probate process, then you should consider leaving them out of your will – but only if you have an alternative plan in place.
For example, with real estate, transfer-on-death deeds and living trusts can help you avoid probate while still ensuring you control the property’s distribution.
Contrary to popular belief, the best place to list funeral instructions is not in a will. While there is no danger in leaving them in the will, we advise that you also consider listing them in a letter of instruction (which is an informal document meant to record personal sentiments). Or communicate your wishes with the estate executor ahead of time.
Why? Because wills are often hard to access for loved ones immediately after a death, there’s no guarantee they’ll see your instruction before the funeral.
Put simply: don’t rely on your will alone for funeral instructions.
Leaving Gifts for Loved Ones Who Are Bad With Money
Not everyone is financially sound. Some people have difficulties managing money.
If that’s the case with your family, it may be wise to avoid leaving wealth to them through your will.
Instead, you can use a trust document that prevents the money from being used or accessed at once. For example, your son might only get access to a share of the money upon his 21st birthday or at other predetermined milestones.
There are also special needs trusts that can ensure your any disabled loved ones are provided for securely and without being disqualified for government benefits.
Gifts for Pets
A common mistake is to write in your will something like, ‘my pet dog should get $10,000’, because animals don’t have the legal ability to own property or money.
However, you can leave the wealth to a loved one to take care of the pet. Creating a pet trust is an even more secure way to ensure your pet is financially cared for.
Pet trusts hold assets and money specifically for the use of your pet only. So whether it’s grooming, pet food or veterinary bills, you know your pet is safe.
Contact an Estate Planning Attorney for Drafting a Will Today
If you’re struggling to draft your will or need advice regarding whether you should create a trust, then our Florida estate planning attorneys can help.
We regularly help Florida residents create wills that are water-tight, free from probate complications and in the best interests of their families.
Battaglia, Ross, Dicus & McQuaid, P.A. is U.S. News and World Reports Tier 1 law firm in Florida, specializing in Estate Planning & Probate since 1958. With award-winning experienced estate planning attorneys, they can help you create a will or trust.