A will serves as a legal document that describes how your assets will be distributed when you’re gone. Having a will in place is one more way to show your family you care. It helps ease the burden for them after you are gone.
Why You Need to Create a Will
A will is an important tool in guiding the major family and financial decisions after your death. A will is not just for the rich. A will is not just for parents. A will is for anyone who wants to make the most of their life, their legacy, and their hard-earned assets – regardless of how much or how little you have.
There are several important reasons you need a will. Among them, creating a will allows you to:
Protect Your Children: If you are the parent of a young child, the importance of a will cannot be overstated. A will allows you to name a guardian for your children. If you die suddenly, this will provide stability for your children during a very difficult time. In addition, a will can help you protect your children’s financial interests.
Designate a Trusted Executor: An executor is a personal representative that you trust to ensure that your wishes are carried out and that all of your affairs are in order.
Decide Who Gets Your Assets: With a will you can determine how your assets are distributed. In addition, you can determine who gets certain items of personal property that may be dear to you—such as family heirlooms.
If you die without a will, you are considered to have died “intestate.” This means a court makes decisions about your assets on your behalf through a lengthy and often stressful process called probate. The purpose of probate is to ensure that following your death all of your assets are accounted for, your debts and obligations paid, and there is an orderly distribution of assets to your beneficiaries.
What’s Included in a Will?
Each state has different requirements about what information should be included in a will. Some of the information you should record in your will include:
- Your name
- If you’re married, your spouse’s name and when you got married
- Your children’s names and arrangements for how stepchildren or foster children
- A statement revoking any other existing will, if there is one
- The name of your executor and usually one alternate
- A list of powers you wish your executor to have
- A list of any special gifts or personal property
- Instructions for distributing your estate after debts, taxes, and other expenses have been paid
Some items should not be included in a will such as retirement/pension accounts and life insurance policies because those benefits are passed directly to the beneficiary named in those documents.
Types of Wills
It’s important to note that states recognize different types of wills. Make sure the type of will you create is accepted in your state.
A simple or statutory will works well for people with small, uncomplicated estates. You can prepare one by filling in the blanks in a state-specific template that contains standard terms that meet your state’s legal requirements.
A holographic will is one you prepare in your own handwriting. In some states, no witnesses are required.
A conditional or contingent will specifies that its provisions are only valid if a certain event happens or does not happen. A common example is the beneficiary reaching a certain age. If the condition in the will is not met and the person does not have another will, the estate will be distributed as if there were no will.
A testamentary trust will sets up one or more trusts for the distribution of part or all of your estate at the time of death.
If you have set up a living trust, you can use a pour-over will to name the trust as your primary beneficiary. When you die, any probate assets not already named in the trust will “pour” into it and be distributed according to its terms.
An oral will, also called a nuncupative will, is spoken, rather than written. Few states recognize this type of will except in emergency situations.
A video will is read in front of a video camera by the testator. Generally, a video will supplements a written copy of the will.
A joint will is one that two people make together, each leaving all of their property and assets to the other. A joint will also stipulates how the assets will be distributed when the second person dies.
A self-proving will (or a self-proving affidavit attached to a will) must be notarized and certifies that the witnesses and testator properly signed the will. This type of will makes it easy for the court to accept the document as the true will of the person who has died, serving as testimony, and avoids the delay and cost of locating witnesses at the time of probate.
If you are faced with imminent death, a deathbed will is often written. Though they are drawn up hastily, they are as legally binding as one prepared in advance, but relying on one to distribute your assets is risky since these types of wills are often contested.
Wills vs. Living Wills
A living will bears no relation to a conventional will and is not used to leave property at death. A living will is a document that allows you to state what type of medical treatment you do or do not wish to receive should you be too ill or injured to communicate your wishes. It may also be referred to as an advance directive or a declaration.
Keep Your Will Current
Keeping your will up-to-date is just as important as creating one. You should review your will after the following events:
- You get married or divorced (a change in marital status may void your will)
- You are unmarried, but have a new partner
- The amount of money and/or property you own changes significantly
- You move to another state (some states do not recognize out-of-state wills as valid)
- Your executor or a beneficiary in your will dies
- There is a birth or adoption of a child in your family
- You change your mind about the provisions in your will
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"Being in the financial planning industry for over 35 years and focusing on end of life planning, we’ve become accustomed to seeing first-hand what families go through after the death of a loved one. Many times, there is added pain and frustration because they just don’t know what to do." Michelle Braddock, Co-Founder, My Life and Wishes Inc.
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