8 ways to leave a mess for your heirs

4. Dawdling indefinitely

Procrastination may be forgivable for young singles with no dependents, but if you never get around to doing anything, the grief experienced by your survivors will be compounded.

Inaction all but guarantees that tensions will run high after you die.

"The biggest single mistake is avoiding the subject altogether," author Clifford says. "There are a couple of reasons that people do that. For one, it's not fun, and I can't make it fun. Secondly, it's procrastination (caused by) fear of thinking about your own mortality."

Christner says: "The rules for probating, or, in effect, determining whether you have a valid will, are somewhat different in every state. And if it's not valid in your state, then the intestate laws in your state determine how your property is distributed."

Some people may put off doing anything because they don't feel it's the right time. But anyone with assets and a family to protect should at least have a will. "Everyone needs to do some estate planning. The only problem is when to do it," says Christner. "The day you should do it is the day you die, because then nothing can change very much."

Failing that, "anyone with a significant amount of assets, who has children or a spouse should make up a will probably in their 30s or 40s."

5. Not trusting trusts

Going through probate, a necessity if you die intestate (without a will), will result in your estate paying too many fees. Though often discussed, federal estate taxes won't even touch most estates, but court costs definitely will if not planned for. Why fritter away as much as 10% of your assets built throughout a lifetime of hard work?

"The whole purpose of having a trust is to avoid probate, because that allows your estate to pass to your loved ones without having to employ an attorney or go to the court," Berkley says. "It just goes directly to your heirs and minimizes many of the expenses to your estate."

Christner says: "A trust doesn't save taxes, but it does save probate costs. Depending on the state, it probably saves between 8% and 10% of the total estate. If you leave everything you own in your estate, and it all goes by will, then maybe 10% of it will go to attorneys, appraisers and executors."

The aim in planning is to minimize the financial exposure to your loved ones when you're no longer here. "By having an estate plan in place, that avoids many, many, many of those expenses," Christner says.

6. Leaving messy financial records

Pawing through someone else's disorganized records isn't anyone's idea of a good time. Add in grief and the stress of trying to unearth a will or some other evidence of planning, and it's downright chaos.

Keeping track of all of your information and organizing it in a recognizable way is vital, Christner says. "Social Security numbers, insurance policies, the name of the companies you do business with, your brokerage accounts and where they're held, and account numbers should all be included."

Berkley agrees. Just because a person passes away doesn't mean that credit card companies stop billing.

"The estate is still going to owe the money," Berkley says. "And all of a sudden children are looking at bills that are past due, and they just don't have the information. So many of us now keep information on our computers. Passwords, screen names, stuff like that -- make that stuff available to your loved ones," he says.

You may want to include a letter designating where you want your personal property to go. "Unless it's in your will, it doesn't have any legal standing," Christner says. "But if it's written down, it can prevent fights between relatives where someone says, 'Oh, he promised me this,' and you can see that it's written down that no, he didn't. He promised that particular thing to someone else because it's in writing, and here it is."

7. Giving your ex-spouse a parting gift

Failing to occasionally update an estate plan or make changes to beneficiaries after divorce, marriage or other life changes spells trouble.

Major changes such as having children or buying and selling property warrant changes in your will or trust. Equally important are making changes to beneficiary designations on retirement accounts and insurance policies, as those forms trump a will.

"An insurance policy that has a beneficiary on it -- that is not dictated by a will or a trust," Orman says. "A retirement account that has a designated beneficiary or a payable-on-death account at a bank -- those accounts aren't dictated by a will or a trust."

Clifford notes: "In some states and with some types of assets, divorce doesn't necessarily revoke the prior spouse as being a beneficiary. For instance, with any federal pension, you have to change the beneficiary. Specifically, you can't just get divorced and assume that your spouse is no longer your beneficiary. And the same thing is true if you have a child: You should update your will or whatever you have."

8. Letting others figure out what you want

Talking to your family about your intentions seems obvious. After all, they will one day be combing through all of your most closely guarded secrets.

"When someone passes away, you as a survivor have to put together these pieces of the puzzle, and many times these pieces don't fit. And you have the hardest time when, if there had been communication, all of this could have been avoided," says Berkley.

"I had one situation that was so bad," he says. "The person died without leaving a will or any instructions, and she left three daughters. And there was such fighting between them over who would get what that it went to the court. The court decided that no one was going to get anything and appointed a public guardian to come in and take the entire inventory and sell everything and then write three checks to the daughters.

"Had the mom left some kind of instructions or indication, all of that would have been prevented. But it happens a lot."

Besides easing the transition after death, leaving specific instructions about your medical care while alive -- specifically, in the form of a medical directive -- also comes in handy.

"We definitely recommend a health care power of attorney if you are temporarily disabled, a financial power of attorney for someone to pay the electric bill and the gardener and the mortgage if you are disabled," Berkley says. "There's also a very important document known as a living will, which directs a physician."

This article was reported by Sheyna Steiner for Bankrate.com.

Updated Aug. 13, 2009

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