Creating a will
Common mistakes and how you can avoid them
4. Understand reasoning of asset allocation
Sometimes, good intentions can have unintended consequences. When creating a will, it’s crucial to analyze the reasoning behind your allocation strategies and try to see the situation from your heirs’ point of view.
A mother has four children. One of her children makes a significantly higher salary than the others. Because of this, in her will, she leaves most of her assets to the other three children, and much less to the child with more money. Her intent isn’t malicious, she just wants to give more to her other children because that child “needs it less.”
This can cause unnecessary animosity between the siblings and even cause confusion and anger from the child who was disinherited. If the decision wasn’t discussed beforehand, the child may feel like they are being punished for being successful. They may even dispute their right to the assets in court – bringing a slew of legal costs to your family.
Think ahead. Talk it out.
Envision how your children will react to your estate decisions. Will they be angry? Pleased? Hurt? Put yourself in their shoes for a moment and analyze your decisions from all angles. Then, discuss your opinions with your children prior to writing your will. You don’t have to change anything based solely on their opinions, but it can be a great starting point to tailor your will to help ensure the outcome you hope for when you pass away.
Creating a will can be complicated, but with a little bit of planning and forethought, you can avoid making some of the most common mistakes seen in estate planning.
Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to include your qualified tax and/or legal professionals in these discussions and decisions to help determine the best options for your particular circumstances.