The Biggest Mistakes People Make With Their Wills and How to Avoid Them

Stacie Dobbie is a senior advanced planning attorney with Northwestern Mutual.

Having a well-written will is an important part of estate planning. When done right, this legal document can ensure your assets go where you’d like when you’re gone. By having these tough decisions made in advance—you can help alleviate unnecessary stress for your loved ones during an emotional time.

If you die without a will, a court will ultimately decide how things pan out—and that may not be what you envisioned. And if you don’t plan ahead, you could run the risk of not having your wishes carried out the way you’d like.

Here are seven common mistakes to avoid when putting together your last will and testament.

1. Failing to keep your will up to date

The will you write today may not reflect your wishes 10 years from now. Your will should ideally be updated after major life events such as:

• Getting married or divorced

• Having a baby

• Becoming widowed

It’s also good practice to review your will periodically to make sure it accounts for changes in your life and still aligns with your values. For example, you may have opened a new investment account or started a successful business that needs to be added to your will, or perhaps your relationship with a beneficiary has changed.

2. Forgetting about taxes

Taxes can affect your legacy and the amount your heirs inherit. Here are some important things to keep in mind when it comes to taxes:

• You may have to pay estate taxes. This federal tax applies to the deceased person’s estate. The good news is that in 2024, it’s only imposed on the portion of the estate’s value that exceeds $13.61 million. Translation: Most estates will be off the hook. However, 12 states and the District of Columbia charge an additional estate tax and some of these have much lower thresholds for when your estate might owe tax.

• You may have to pay taxes on the money you inherit. How much you owe will depend on where you live, the amount you inherit and your relationship to the deceased person. Six states currently charge an additional tax on the inheritance a person receives. The tax rate could be as high as 18 percent in some cases, though some states will only tax the portion of an inheritance that exceeds a certain amount—and most states don’t have an inheritance tax at all. Make sure you understand the rules where you live.

3. Not appointing a trusted executor

When putting together a will, you’ll choose an executor to carry out your final wishes. The executor is tasked with jobs like:

• Reporting the death to creditors

• Contacting the appropriate government agencies

• Initiating the probate process, which is when a court validates the legitimacy of your will

• Assisting with funeral arrangements

• Maintaining the estate until all assets are distributed

The executor should be someone you trust who’s up for the job. You may need to update your executor if your original choice has passed away, moved out of the country or become incapacitated. It’s also a good idea to have a back-up plan in case your chosen executor changes their mind when the time comes.

4. Not coordinating beneficiaries

With savings vehicles like retirement accounts or products like life insurance policies, you can add a beneficiary that will receive your account or benefit when you pass away. Your beneficiaries might include family members, friends or charitable organizations. Accounts that have beneficiaries include:

• 401(k)s

• Individual retirement accounts (IRAs)

• Health savings accounts (HSAs)

• Life insurance policies

The beneficiaries that you specify on these accounts trump what’s in your will. Therefore, it’s important to ensure your will and beneficiary designations match. With any life change—especially adding members to your family or changing your marital status—you'll want to revisit your beneficiaries.

5. Leaving assets unaccounted for

When writing or updating your will, make sure all major assets are accounted for. That includes:

• Bank accounts

• Investment accounts

• Life insurance policies

• Real estate

• Vehicles

• Businesses

• Digital assets

• Jewelry

• Artwork

• Family heirlooms

You might consider adding a residuary clause to your will. This explains what will happen to assets that are left over after specified gifts are distributed. It’s another way to ensure that all your assets go where you’d like them to.

Another tool to consider is a personal property memorandum. This is an ancillary document that accompanies a will. This allows you to designate tangible personal property, such as jewelry, artwork, heirlooms, and sentimental items, to loved ones without updating your will. Most, but not all, states consider this a legally binding document and will incorporate this document into your will. Make sure you check with your state law to see if your state allows such a document.

6. Only planning for after you’re gone

A will is just one part of a larger estate plan. And estate planning isn’t just something that covers what you want after you’re gone—it can set up safety nets for you during your lifetime too. Here are some documents you’ll want to have in place while you’re living:

• Power of attorney: This is a legal document that allows someone else to act on your behalf if you are unable to advocate for yourself. A financial power of attorney (to name someone to act on your behalf financially) and a health care power of attorney (to designate someone to make medical decisions for you) could name the same person, or you can pick two different people that you trust.

• Revocable trust: You can place certain assets into a revocable trust (sometimes called a living trust) and serve as your own trustee. This type of trust can be modified at any time and gives you more control over how and when assets are distributed. A revocable trust is a great way to avoid probate.

7. Not communicating burial and funeral instructions in advance

Wills typically aren’t read until weeks after death. Be sure to communicate your burial and funeral wishes to your family while you’re alive and well. This can allow them to honor your life in a way that feels right to you.

An estate plan has many benefits—but its main goal is to allow for a smooth transition of wealth. Your Northwestern Mutual financial advisor will seek to understand what’s important to you and provide personalized guidance and help to ensure that your financial planning is coordinated with your will and estate plan.

This publication is not intended as legal or tax advice. This information was compiled by the advanced planning attorneys of The Northwestern Mutual Life Insurance Company. It is intended solely for the information and education of Northwestern Mutual Financial Representatives, their customers, and the legal and tax advisors of those customers. It must not be used as a basis for legal or tax advice, and is not intended to be used and cannot be used to avoid any penalties that may be imposed on a taxpayer. Northwestern Mutual and its Financial Representatives do not give legal or tax advice. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor. Tax and other planning developments after the original date of publication may affect these discussions.