As you may already know, you do not need a lawyer to write your Will.
However, if you decided to write your own Will, you may want to avoid some common mistakes.
Top 8 Common Mistakes to Avoid in Your Will 1: Planning only for Death, and not Life 2: Not considering how you want your Debts to be paid 3: Bequeathing only Physical Assets 4: Distributing Assets which are not part of the estate 5: Not choosing the right Witnesses (in certain countries) 6: Surprising your Executor (in certain countries) 7: Not writing a new Will after a Marriage or a Divorce 8: Not having a Residuary Clause Bonus: Will for Expatriates
Mistake #1: Planning only for Death, and not Life
Your Will comes in useful when you passed on but have you considered what happens in the event you meet with a serious accident, suffer a stroke or even dementia? You may wish to address those circumstances through the use of what is called a 'Living Will'. This takes the form of a Lasting Power or Attorney (LPA) and an Advance Directive.
What is an LPA ?
When you make a Lasting Power of Attorney (LPA), you appoint someone you trust to decide and act on your behalf should you lose the mental capacity to make decisions on your financial and personal matters. If you do not make an LPA and subsequently lose your mental capacity, one of your family members needs to apply for a Court Order to make decisions on your behalf as administrator. Such a court application usually involves spending much unnecessary time and money.
What is an Advance Directive?
An Advance Directive is a document that you sign in advance to inform the doctor treating you, in the event you become terminally ill and unconscious, that you do not want any extraordinary life-sustaining treatment to be used to prolong your life. This is a separate topic that we will cover in a separate blog entry with more information.
Mistake #2: Not considering how you want your Debts to be paid
One of the commonly-made mistakes is forgetting that you have debts to pay. Debts include your credit card balance, utilities, mortgage loans, etc.
No, the banks do not automatically write them off after your death. Neither are your family members responsible for the debts left behind by you if you should pass away.
In general, any debt left unpaid by you upon death will have to be paid out of your estate before the remaining estate may be distributed to the beneficiaries listed in your Will.
Only in the event you have a personal loan taken jointly with a family member, has that family member to assume the responsibility to repay the loan. If that family member is unable to service the loan singly, and insufficient assets are distributed to service this outstanding loan, it will create a lot of financial stress to that family member.
If you took a mortgage loan from a bank to finance a property, the joint owner of this property has to take over the repayment of the mortgage loan upon your death. Similarly, you may want to consider if the joint owner has sufficient financial independence to continue servicing the mortgage. For certain properties, it is not compulsory to buy a mortgage insurance. It is then prudent to consider buying that mortgage insurance to protect loved ones from the sudden financial burden of a mortgage loan.
Mistake #3: Bequeathing only Physical Assets
In this digital era, overlooking online assets such as social media accounts and email accounts is a common blunder when preparing wills. Some of these assets, such as digital photos, might hold financial or sentimental value. Others, like login credentials, could be misused if distributed to someone you had not intended to.
More people also keep online trading accounts, crypto accounts or digital banking accounts. If you have online accounts, it may be important to bequeath your digital information and property in your Will. Your loved ones need to be able to log into your accounts, get the information they need and close those accounts based on your instructions in your Will.
Mistake #4: Distributing Assets which are not part of the estate
Assets held in joint tenancy, like a joint bank account or, in most cases, the family home, cannot be willed to someone else. The surviving owner takes ownership of the entire property automatically. Basically, joint tenancy supersedes your Will.
On the contrary, for a property that is held as tenants-in-common, you can will away your share of the property. It is possible to convert a joint tenancy to tenants-in-common, but you will need to get a conveyancing lawyer to do the legal documentation.
Other assets are also not part of the estate. This is typically the case of assurance policies with a named beneficiary.
Mistake #5: Not choosing the right Witnesses (generally in common law countries, i.e. England, Australia, USA, Canada, New Zealand, etc.)
For the signing of your Will, you need to have 2 adult witnesses to your Will. Note that the 2 witnesses must not be beneficiaries or spouses of your beneficiaries in your Will, thereby ensuring that they do not have a direct interest in your estate and as such are impartial.
Failing to choose the right witnesses to your Will could lead to your Will becoming invalid. Witnesses should preferably be literate and reliable individuals who are able to help support the validity of the Will should there be any doubts raised in Court if the Will becomes contested.
Mistake #6: Surprising your Executor (generally in common law countries, i.e. England, Australia, USA, Canada, New Zealand, etc.)
It is important to discuss and inform your family member or friend before you appoint them as your executor in your Will. It is probably not a good idea to “surprise” the executor with their appointment.
As the executor’s signature on the Will is not necessary, there may be situations where the appointed executor had not been made aware of their appointment. In cases where the executor is unwilling to take on the role, it means additional costs and time delay in Court applications to appoint an administrator for the estate.
Mistake #7: Not writing a new Will after a Marriage or a Divorce
Some people forget that a Will may, in certain countries, be automatically revoked upon marriage or re-marriage. The exception is if the Will expressly contemplates the marriage. Therefore, remember to write a new Will after your wedding.
Additionally, a divorce does not revoke a Will. You may have previously made a Will to distribute your assets to your ex-spouse after your death, and this will remain valid even when your marriage has legally ended. If you have made a Will and have gone through a divorce, it is time to revisit your Will.
Remember that an estranged couple going through a separation is still a legally married couple, and if you have not done a Will, under intestate succession, your estranged spouse could very well inherit 50% of your estate. Further, as most couples hold their matrimonial home as joint tenants, under the right of survivorship, the surviving spouse will inherit the whole of the property upon the death of the other.
In situations of remarriage, you may want to leave some of your estates to your step-children. If you did not adopt them officially, they are not considered your children and will not be entitled to any distribution of your estate under intestate laws.
Mistake #8: Not having a Residuary Clause
A residuary clause is a ‘catch-all’ clause that describes how to distribute the rest of the assets that you have not listed specifically. Without such a clause, you risk having a complicated probate/court case in which assets not covered by the Will end up being distributed by intestacy laws instead of according to your wishes.
Bonus: Will for Expatriates
If you are an expatriate, have lived in several countries or have family or assets overseas, different inheritance laws apply to different types of assets.
For real estate property such as apartments and houses, the laws where the property is situated apply. However, for other assets such as bank accounts, stock and shares, the laws of your habitual residence at the time of your death apply.
Further, as certain countries might not recognize the part of your Will dealing with assets situated in another jurisdiction, it is advisable to have a separate Will for each country where your assets are held.
Writing a Will and updating your Will regularly is the very first step, and it’s an important one. But more importantly, you should register your updated Will and store it in a safe place. liteWill lets you register your Will and store an electronic copy of your Will. Otherwise, all the good work that you have done becomes irrelevant if your person of confidence is not able to find your Will in a timely manner. ‘A Will that is not registered is like a Will that does not exist’.
This portion of the website is for information only. The statements and opinions are the expression of their author, not of liteWill, and have not been evaluated for accuracy, completeness or changes in the law. Information contained in this article is not a substitute for tax or legal advice.
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