When it comes to creating a will, it is important to make sure you include everything you want to pass on to your loved ones. However, certain items might not be suitable for inclusion.
Being aware of what is commonly excluded from wills helps you make wiser choices when drawing yours up.
1. Jointly owned property
If you own property with someone else, such as a spouse or business partner, it often does not require inclusion in your will. In the event of your passing, ownership of jointly held property usually transfers directly to the surviving owner(s).
2. Life insurance proceeds
Life insurance policies often have designated beneficiaries. When you pass away, the proceeds from your life insurance policy go directly to these beneficiaries, bypassing the probate process. Therefore, there is usually no need to include life insurance proceeds.
3. Retirement accounts
Retirement accounts like IRAs and 401(k)s also allow you to name beneficiaries. Upon your passing, the funds from these accounts transfer directly to the designated beneficiaries, making it unnecessary to include them.
4. Payable-on-death bank accounts
POD bank accounts work much like life insurance policies and retirement accounts. You can designate a beneficiary to receive the funds in the account upon your passing. As a result, these accounts do not typically need addressing in your will.
5. Funeral instructions
While it is important to communicate your funeral wishes to your loved ones, your will might not be the optimal place to do so. Wills are often read after the funeral takes place, so including instructions in your will might not be practical. Instead, consider discussing your wishes with your family or documenting them in a separate document.
6. Certain debts
Of course, your will can outline how you want your assets distributed, but it generally is not the place to address certain types of debts. Debts such as mortgages or car loans are typically secured by the property they finance and handled separately from your will.
By understanding which items to leave out as you prepare your will, you can better ensure the effective and smooth execution of your final wishes.