Knowing what not to include when making a will in California is essential. Drafting a will may seem simple at first sight. However, some common mistakes can lead to problems during probate. In some cases, these mistakes may even lead to invalidation of the will.
Many people don’t realize the value of having a proper will in place until they need it most. If you fail to include particular items in your will, then the state may decide what happens with those assets after you pass away. Making proper arrangements before you pass away is a wise decision you should make.
A good probate lawyer can help you avoid these common mistakes. Moreover, an estate planning attorney can help ensure that everything goes smoothly during asset distribution. Our experienced probate law firm created this blog post to help clients understand what they should not do when making their last will and what they cannot include in their will.
Kinds of Property You Cannot Include When Making Your Last Will
In general, anything that is not your personal property cannot be included in your will. For example, in case the decedent’s last will state that they want to give their friend a blue book. Then this irregular request cannot be taken seriously by the court.
Even if the decedent has a special connection to another person, this does not make them inheritable beneficiaries under California law.
If you omit a specific item from your will, it may not be distributed according to your wishes upon your death. This is why it is necessary to have proper legal representation before creating or modifying any will to avoid these problems altogether.
Joint Tenancy Property
In California, any property that is held in joint tenancy cannot be given away by will. This is because, automatically, upon the death of one tenant, the surviving tenant inherits the entire property.
For this reason, it is vital to sever any joint tenancy arrangements before you make your will. Otherwise, the property will not pass according to your wishes after you die.
For example, community property under a joint tenancy cannot go to your dependent. If a surviving co-owner is included in a joint tenancy, they will gain the right over the joint property.
Remember, any changes you make to your will must be in accordance with California state law. Suppose you have any questions about what can and cannot be included in your will. In that case, it is best to seek legal help from an experienced probate lawyer.
Property in a Living Trust
In California, you can include specific real estate property in a living trust. This type of trust allows you to manage your assets during your lifetime. A property that is held in a living trust avoids the need for probate.
Nevertheless, after your death, the trustee will distribute the assets according to your wishes, as stated in the trust document. If you die without a legal will, the state will decide how to distribute your assets, which may not be following your wishes.
As a result, it is vital to have an up-to-date and valid living trust. This will ensure that all of your property is passed on according to your wishes. If you do not have a living trust, our estate planning attorneys can help you create one.
Life Insurance or Annuity Proceeds
It is possible to name a beneficiary for your life insurance or an annuity policy in California. This will ensure that the policy proceeds are paid out according to your wishes after death.
The beneficiary designations you choose will receive the proceeds tax-free. Consequently, choosing someone you trust to receive these assets is essential. If you do not have a beneficiary identified, the proceeds will be paid out to your estate.
For this reason, it is practically not possible to include life insurance in your will. Choosing the appropriate person as your beneficiary is a crucial decision that you should make.
Proceeds From Retirement Plans, IRAs, Pensions, & 401(k)
In California, you can name a contingent beneficiary for your retirement plans. For example, you can choose your spouse as the primary beneficiary for your government benefits, such as IRA or 401(k). Then if they are not alive at the time of your death, you can list someone else to receive these assets.
However, suppose you fail to designate a contingent beneficiary. In that case, the account will go into probate before it is distributed according to your wishes. On top of that, any changes made to an existing beneficiary designation must be re-confirmed by the decedent’s estate after death.
Even if naming specific beneficiaries is allowed in some states. It may not be permitted under federal law. Consequently, most attorneys advise against including retirement accounts in wills because of potential confusion after death.
Instead, it is best to create a trust and name it the beneficiary of these accounts. This will ensure that the assets are passed on according to your wishes. If you do not have a trust, our estate planning attorneys can help you create one.
Stocks and Bonds Held in Beneficiary
In California, you can name a beneficiary for your stocks and bonds. Consequently, it is not possible to include these assets in your last will. If a terrible occurrence happens to you, then your registered beneficiary will receive your stocks and bonds.
This does not mean that all stocks and bonds cannot go through probate. It simply means that some cannot do so unless an exception applies. For example, if you hold stocks in your name, then they would pass through your will.
Furthermore, all securities held in joint tenancy with rights of survivorship automatically pass to the surviving owner after death. This rule also applies to any digital assets or money market funds held in payable-on-death accounts transfer. Without probate proceedings, these assets will directly transfer to the account holder’s successor.
Pay-on-Death Bank Accounts
It is possible to specify a beneficiary for your bank account in California. This will ensure that the account holder’s wishes are followed after death. In addition, if you do not have a designated beneficiary, the state will decide how to distribute the funds in the account.
This process is known as a pay-on-death designation or POD. The payee can be anyone you choose, such as family members, friends, or charity. Keep in mind that you must set up this type of arrangement during your lifetime. After death, it is too late to add or change the beneficiary.
For this reason, you must thoroughly choose the person you want to receive the assets from your bank account. You should also consider updating the details if your family or the account beneficiary changes.
Do Not Leave Funeral Instructions When Making Your Last Will
It is common to leave instructions about your funeral arrangements or funeral wishes in your will. However, it would be best if you refrained from doing so. The reason for this is that the executor can easily change these instructions without involving any third parties.
Executors are legally allowed to do so if they think it is what you would have wanted. Consequently, it is best not to include these details in your final wishes. Instead, leave all of these instructions in what is known as a funeral planning document or living trust.
Do Not Use Wills to Escape Estate Taxes
Since California also has an inheritance or succession tax, you may want to ensure your real estate plan passes through probate. If not, you can leave all of your assets to your spouse if they survive you.
After that, your spouse will be able to use the marital deduction exclusion to shelter their inheritance from taxation. This exemption is available under federal law for any amount passing between spouses during life and death.
Will Do Not Escape Probate
It is a common misconception that wills can help you avoid probate. Unfortunately, this is not the case. The probate process is a legal procedure that must occur no matter what type of last you will have.
The only known way to avoid probate is to create a trust and name it as the beneficiary of your assets. This includes all property, such as real estate, stocks, bonds, bank accounts, and retirement accounts. If you do not have trust, our attorneys can help you create one.
Be Careful With Conditions You Include on Gifts
When making your will, it is essential to remember that any conditions you include on gifts will be legally binding. This means that the gift recipient must meet your specific requirements to obtain the inheritance.
If they do not, they will not be able to take possession of the property even if they are the rightful heir. For this reason, it is always best to give away your assets outright and avoid including any conditions.
This also applies when making a gift to a minor child. You should never leave the custody or management of the asset in question to the child. Instead, name an adult as a custodian who can manage it on behalf of the child until they reach maturity.
Do Not Leave Money or Gifts for Illegal Purposes
When making your will, you should never leave money or assets to anyone with the intent of committing a crime. This could include funding terrorism, drug trafficking, or any other illegal activity.
Suppose you choose to leave money or assets to someone for this purpose. In that case, the executor of your will can take back the property and distribute it legally and appropriately. This includes giving it to law enforcement or another government agency.
Do Not Arrange Care for a Disabled Person When Making Your Last Will
It is crucial to have a plan to take care of disabled people if they cannot take care of themselves. This usually includes appointing a guardian to make decisions on their behalf.
However, you should never include this type of arrangement in your will. This is because the guardianship process is often long and complicated. It can also be expensive, especially if the guardian has to go to court to obtain custody of the disabled person.
Instead, you should create a separate document known as an advance health care directive or living trust. This document will delegate someone to make decisions about your health care when you can no longer do so yourself.
Do Not Leave Gifts to Pets in Your Will
You may want to honor your beloved pet by leaving them gifts in your will. However, this is not a good idea because the court could invalidate the gift before you die.
For example, if you leave your cat or dog to someone else in your will and they are still alive when you pass away, it can cause severe problems for that person. If they cannot properly take care of the animal, they must either pay for its care or give it up to an animal shelter.
Contact a Probate Lawyer in California for Help With Your Wills
Making your will is an important task and should not be taken lightly. By knowing what not to include, you can avoid common mistakes and ensure that your final wishes are carried out correctly. If you have any questions about what is allowed in a will, you must contact an experienced probate lawyer.
Our lawyer at Alden Law Firm can give you expert legal advice for your situation. Call us now at (213) 214-6937 for a free consultation. You can also fill up our online form here.