- Wills must be signed by you and two witnesses to be valid
- Avoid probate by designating account “Payable On Death”
- Retitle your home “Rights of Survivorship”
- Retitle your car to include both spouses and conjunction “OR,” not and
- Make sure trusted person knows how to find your will
(WSPA) – We all want our family to avoid additional pain and stress after we pass away.
However, all too often, families put off making a will or fail to take other steps that can prevent many key assets from getting tied up in probate for a year or more.
In this 7NEWS Consumer Exclusive, we looked into the top 7 mistakes to avoid when it comes to making a will.
#7: Not having a proper will
Nancy Crawford, in Anderson, is a grandmother who has been very focused on end-of-life planning ever since she was diagnosed with a fatal heart condition 10 years ago.
“I don’t want to leave no burden on nobody,” she told 7NEWS.
So, Crawford and her husband, Haskell, have kept their will updated, but her health isn’t the only reason. She was inspired by what happened to her father.
“We did make sure he had a will, but he forgot to sign it, so we had to go through a lot,” she said with a sigh.
Estate Planning Attorney Phillip Martin with Merline and Meacham said a valid will in South Carolina must be properly executed including your signature and those of two witnesses who are not interested parties.
We asked Martin what was the biggest mistake that he sees in his industry.
“I think thinking, that I’ll deal with it later,” Martin said. “That’s something that I’ve heard time and again and kind of breaks my heart, even more so than not knowing you should have planned at all, is knowing you should have planned and didn’t get around to it.”
Companies like LegalZoom and Rocket Lawyer offer low-cost forms online, but Martin warns they may overlook key issues facing your estate.
Making a will with the help of an attorney means they can also walk you through important documents like living wills and choosing a personal representative and healthcare power of attorney.
Many families find it is money well spent.
Either way, having a signed will is better than none, and Martin added don’t forget to update the will as needed.
#6: Forgetting to pay income tax
While most of us won’t face the Federal estate tax which only affects estates larger than about $13 million, don’t overlook that last income tax that must be paid.
“That’s honestly the most common mistake people can make is thinking, they passed away, they just get a freebie for income taxes that year. That’s not the case at all,” Martin explained.
#5: Failing to free your cash
The probate process in South Carolina takes on average about a year.
It gives creditors time to file claims, and during that time, family members may have limited access to the funds and property held in the estate.
When it comes to your financial accounts, there are two free steps that will prevent that money from getting locked up by probate.
- title your bank accounts jointly
- or designate individual accounts as Payable On Death, P.O.D. also known as Transferable On Death, T.O.D.
#4: Not protecting your home from probate
One way to avoid probate and those court fees is through a revocable trust.
That is an option that the Crawfords are looking into.
“I don’t want to leave or my children what we were left with,” Crawford said.
Still, a revocable trust does come with extra upfront costs, so another way to prevent your home from going to probate is to retitle the deed to include the wording “rights of survivorship.”
#3: Car title language
One word is crucial to preventing your vehicle from going to probate, the conjunction: OR.
Any car title that lists just your name will go to probate. And if it lists both you “AND” your spouse but not you “OR” your spouse, that means half that asset goes to probate.
#2: Updating retirement accounts
Your 401K and IRA are naturally non-probate, meaning they pass directly to the beneficiaries listed on the accounts, but if you haven’t updated that list, those loved ones are left out.
#1: The invisible will
Martin said many estate planning attorneys like him hear one story after another of families that can’t find the will.
“Lost wills are just as bad as not having a will. Lost wills in SC are presumed to be revoked,” Martin said.
He also advises people to keep their wills in a safe place at home like a firebox or safe, rather than in a safe deposit box at a bank.
Martin said banks tend to be very cautious about allowing people to access safe deposit boxes, even just to find out if an original will is contained therein.
Aside from that, sometimes family members may not even know the decedent had a safe deposit box and assume there is no Will when all attempts to find it are unsuccessful.
The Crawfords are making sure someone trustworthy knows how to access the hard copy.
“Like the bible says, get your house in order, that’s the truth,” Crawford said with a smile.