You want your beneficiaries to be happy with whatever they inherit after you are gone. You, therefore, take time to work out who is going to get what and make the appropriate provisions in your will.
In so doing, you must be careful not to make errors that could result in disgruntled heirs who could end up arguing with each other over their inheritance, or lack thereof. With that in mind, here are three common mistakes to avoid:
1. Naming an irresponsible heir
Naming a financially irresponsible child or sibling in your will as a direct beneficiary could see that particular inheritance quickly disappear. The cause might be gambling, addiction to alcohol or drugs or a weakness for expensive spending sprees. You might consider creating a lifetime spendthrift trust, which would benefit your heir and protect the assets from creditors.
2. Naming a minor
If you name a minor child as the beneficiary of your life insurance policy, he or she will inherit the proceeds at the age of 18, and given the child’s lack of financial experience, those proceeds could be gone in a flash. Instead, consider naming your estate as the beneficiary. Your assets would go through probate and into a testamentary trust established for your child through the terms of your will.
3. Naming your child as a sole beneficiary
You might name your eldest child as the sole beneficiary of your will. The idea is for him to pay your final expenses and funeral costs, then distribute the balance in equal amounts to his siblings. The problem is that your eldest son is under no obligation to use this money as you intended. He could keep it all for himself, in which case beneficiary disputes would likely erupt.
Taking precautions
An experienced attorney will tell you that updating your will periodically is essential. This the best way to ensure the accuracy of your final wishes and instructions to avoid beneficiary disputes after you pass away. Even the most mild-mannered child can become a force to reckon with if there is a major issue regarding the inheritance he or she expected.