What Shouldn’t Be Put in a Will?

What Shouldn’t Be Put in a Will?

Money Talks News’ recent article entitled “7 Things You Should Not Include in Your Will” suggests that as you think about what to put in your will, note that estate planning attorneys caution against including the following items.  Read the article for answers to the question”What Shouldn’t Be Put in a Will?”.  They are:

1. Leaving a buck to someone you want to disinherit. The thought is that leaving a single dollar to someone you are disinheriting will prevent them from contesting a will. However, it could have the opposite effect. Instead of keeping them out of the process, making someone an interested party allows them into the court proceedings. They could contest the will.  A better approach is to state the reasons you are disinheriting the person, as well as to put in some protections against a Louisiana forced heirship claim.  Yes, you can build in protections against a forced heirship claim, but few attorneys know about these secret steps.
2. Adding a non-contestability clause. Also know as “in terrorem” clauses, these clauses say that if someone contests the will, they forfeit any inheritance due to them. However, the problem with non-contestability clauses is that they only deter people who have something to lose in the will. If you are already fully disinheriting someone, this clause will have no effect as to them.  Rather than rely on one of these clauses, consult with an estate planning attorney about other options if you think a disgruntled relative might challenge your will, particularly regarding defenses to a forced heirship claim.
3. Retirement plans. Accounts like 401(k) plans and IRAs also should be left out of wills. That is because of tax implications. The IRS has rules about how these accounts are to be transferred if your heirs want to avoid a large tax bill. Instead, make sure that the beneficiaries are named on the accounts, so they can bypass the court system.
4. Trusts. Some people use their will to create a testamentary trust that holds and distributes assets after their death. Testamentary trusts do have their place in estate planning.  However, if you embed a trust in a will, you will still have to go through probate. Ask an experienced estate planning attorney about setting up a revocable – or living – trust to do the same thing without the need to go through probate.
5. Accounts with beneficiaries. Assign beneficiaries to accounts, whenever possible. Accounts that have beneficiaries, transfer-on-death provisions or joint owners can be passed to heirs .  However, be careful that any payable on death designations that you have established with banks are reflected in your last will and testament.  This is because in Louisiana, an account wiht a payable on death designation, without careful planning, is a lawsuit waiting to happen.  Read more about this topic at this blog post: What Is a POD Account? A litigation time bomb.
6. Detailed financial information. The bank accounts you have now might not be those you have when you die. As a result, there is no need to divvy up specific accounts among your heirs in a will. Rather you should create a financial cheat sheet outside of your will (that you can change as circumstances warrant) that will make it easy for your executor to locate all of your assets.
7. NOT APPLICABLE: Naming an out-of-state personal representative. This last point, listed in the Money Talks News’ article “What Shouldn’t Be Put in a Will?”does not apply to Louisiana.  In Louisiana, you can name an out-of-state succession representative.  However, the representative needs to appoint a person for service of process in Louisiana in the probate proceeding.  Usually the person appointed is the Louisiana attorney hired to help your succession representative administer your Louisiana probate proceeding.  In other words, feel free to name an out-of-state person as your succession representative if that person is the best qualified for the position.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “What Shouldn’t Be Put in a Will?” read also these additional articles: Can Medicine I Take Regularly Raise My Blood Pressure? and Warning Signs an Elderly Parent is Being Scammed and What are the Biggest Retirement Costs Often Overlooked? and Is Estate Planning Affected by Property in Two States?

Reference: Money Talks News (March 29, 2022) “7 Things You Should Not Include in Your Will”