What Not to Include in Your Will: Essential Considerations for Estate Planning

Estate planning is a crucial process that ensures your assets and personal affairs are managed according to your wishes after your passing. However, many people overlook a critical aspect of will drafting—knowing what not to include. Certain assets and directives should be handled outside of your will to avoid legal complications, financial loss, or unintended consequences.

1. Assets for Individuals with Special Needs

Leaving money directly to a loved one with special needs can jeopardize their eligibility for government assistance programs like Medicaid or Supplemental Security Income (SSI). Instead, consider establishing a Supplemental Needs Trust to provide for their care while preserving their benefits. These trusts can be structured in two ways:

• Third-Party Special Needs Trusts are funded with assets belonging to someone other than the disabled individual, such as a parent, grandparent, or other relatives. These trusts do not require repayment to Medicaid upon the beneficiary’s death, making them a more flexible and protective option.
• First-Party Special Needs Trusts are funded with assets that belong to the disabled individual, such as an inheritance or personal injury settlement. These trusts, created under the Omnibus Budget Reconciliation Act (OBRA), must include a payback provision requiring any remaining funds to be used to reimburse Medicaid upon the beneficiary’s passing.

Both types of trusts can hold various assets, including cash, real estate, investments, and life insurance, ensuring that funds are managed appropriately for the beneficiary’s lifetime care while maintaining essential government benefits.

2. Pets and Their Financial Care

Since pets are legally classified as property, they cannot inherit money or assets. If you want to ensure their well-being, create a pet trust, which designates funds and assigns a caretaker with legal obligations to use the money for your pet’s care. Without this structure, there is no guarantee that the person you informally designate will use the funds as intended, potentially leaving your pet's future uncertain.

3. Non-Probate Assets

Many financial accounts and insurance policies bypass probate because they have designated beneficiaries. These include:

• Life insurance policies
• 401(k) and IRA accounts
• Pay-on-death (POD) or transfer-on-death (TOD) bank accounts.

Wills do not override beneficiary designations, so ensure these assets are correctly assigned to avoid conflicts. Failing to update your beneficiary designations can lead to unintended results, such as an ex-spouse or a deceased relative still being listed, which can create disputes and legal headaches for your heir

4. Fixed Dollar Amount Bequests

Bequeathing large fixed sums rather than percentages can cause financial strain on your estate. If the value of your estate decreases over time, some beneficiaries may receive nothing while others receive more than intended. Using percentages instead allows for equitable distribution, adapting to fluctuations in estate value. Additionally, creditors and taxes can deplete your estate, leaving little to fulfill fixed monetary gifts, which can lead to legal challenges if the remaining beneficiaries feel shortchanged.

5. Conditional Gifts

Gifts that come with conditions—such as requiring someone to marry, divorce, or maintain certain behaviors—can create legal challenges and disputes. Instead, consider using incentive trusts, which allow for more structured but legally sound conditions. Courts often frown upon wills that attempt to control personal choices, and poorly worded conditions can be deemed unenforceable, leading to prolonged litigation.

6. Sensitive Personal Information

Including social security numbers, financial account details, or digital passwords in your will is a major security risk. Since wills become public record after probate, this information should be kept in a separate, secure documentaccessible only to your executor. A comprehensive estate plan should include a digital asset management strategy, ensuring that critical online accounts and financial information are accessible to the right person while remaining protected from identity theft or fraud.

7. Funeral Instructions

Since wills are often read after the funeral, they are not the best place to document your burial preferences. Instead, write a separate funeral directive and communicate your wishes with your family in advance. Many states allow legally binding funeral directives that designate a specific person to make arrangements, preventing disputes among family members who may have differing opinions on how your final arrangements should be handled.

8. Firearms and Other Regulated Assets

Guns and other regulated assets require specific legal procedures for transfer. Instead of including them in your will, consider creating a gun trust to ensure compliance with state and federal regulations. Firearms ownership is highly regulated, and failure to properly transfer them can result in criminal liability for your heirs. A gun trust allows for the lawful management of these assets while preserving privacy and preventing legal entanglements.

9. Personal Disparagements

Disinheriting a beneficiary is legal, but including negative remarks about them can lead to resentment and potential legal challenges. A simple statement such as “I make no provision for [Name]” is legally sufficient and minimizes emotional and legal disputes. Adding inflammatory language may fuel contests of the will, potentially leading to costly probate litigation that can delay distribution and drain estate resources.

10. Business Interests

Wills are not the best vehicle for transferring business assets, as they become public recordduring probate. Instead, establish a business succession plan or trustto ensure smooth ownership transition while protecting sensitive business information. A properly structured business succession plan can prevent disruption, maintain operational stability, and safeguard proprietary information, ensuring your business continues without unnecessary legal entanglements.

Final Thoughts

A well-crafted estate plan does more than distribute wealth—it ensures legal clarity and financial security for your heirs. By keeping these considerations in mind, you can prevent unnecessary complications and create a more effective estate plan.

Points to Ponder:

• Have you designated proper beneficiaries for your non-probate assets?
• Have you considered trusts for vulnerable dependents or special assets?
• Are your funeral and business succession plans documented separately?
• Is your estate structured to avoid potential legal disputes?

Estate planning is a dynamic process that requires periodic reviews and updates. Consult an experienced estate attorney to ensure your will aligns with your long-term financial goals and family’s needs.

Note: This is brought to you by the RJ Fichera Law Firm , where our mission is to provide trusted, professional legal services and strategic advice to assist our clients in their personal and business matters. Our firm is committed to delivering efficient and cost-effective legal services focusing on communication, responsiveness, and attention to detail. For more information about our services, contact us today !

Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.

Protect your rights with trusted legal expertise – visit the RJ Fichera Law Firm today to consult with a dedicated attorney committed to your best outcome.With an Ameriprise financial advisor to guide you through the process, you can create an estate plan that is aligned to your financial goals and creates a legacy that reflects your values.