Four Biggest Mistakes with Your Will/Estate Plan
Most people know they should have a will. Not having one can leave your loved ones with a big mess. However, just having a will is not sufficient – below are four considerations we address with our clients to ensure they have better wills/estate plans.
- Avoid windfall. When leaving significant money to heirs, people sometimes choose to bequeath it outright, regardless of the beneficiaries’ age. Many people either may not be able to handle – or do not want to handle the stress – of such windfalls. Further, giving unfettered access to assets may expose the assets to spouses, ex-spouses, and other creditors. A better option is to leave the assets to a trust to manage the assets after death. Such trusts may also offer tax and asset-protection advantages to the beneficiaries.
- Remember digital assets. We live in a largely digital world and it is important that your fiduciary has access to manage your digital assets, while also protecting your privacy in certain electronic communications such as emails, text messages, and social media accounts. Don’t store usernames and passwords in an old computer or in a drawer. Instead, consider using a hardware wallet or a digital asset planning form as part of your estate plan to ensure your fiduciary knows how to find and access the information.
- Make regular updates. “Write it and forget it” is a common theme for wills. But the documents should be updated every few years because tax laws and your family circumstances and composition are likely to change over time. People who have made their wills years earlier can change their minds about who should get what and which charities to support. Appropriate guardians and distribution schemes for children, too, can change over time, which is why periodic reviews are critical.
- Full disclosure – prevent conflicts. Conflicts between heirs tend to happen more often when they are surprised by the contents of wills or trusts; accordingly, we recommend full disclosure to your beneficiaries and fiduciaries about your intentions. While these conversations can be difficult, having them in advance mitigates the risk of resentment, and possibly litigation, among heirs after a loved one dies. We can assist you in having these conversations.
For assistance with any legal needs related to your business or estate planning, contact Fournier Legal Services for a consultation at jfournier@jeflegal.com or 860.670.3535.
Joseph E. Fournier is an Attorney and a CPA who has more than twenty years of experience in a variety of business legal matters, including start-ups and company formations, drafting shareholder and operating agreements, contracts, employment law, commercial litigation, tax planning and audit defense, and mergers and acquisitions (M&A). He also handles estate planning matters, such as business succession planning, wills, trusts, and probate.