A will is a legal document that states who will get all of your assets upon your death. If you do not have this document and have not named an executor – someone to execute your wishes – the choices will be left up to the courts. A probate court will provide an administrator to decide where the assets will go.
Not having a will means you have nothing that states who gets all of your assets, leaving your family scrambling. It could spell double the anguish for your loved ones and cause more family strife. Let’s examine when and how to make a will so that we can avoid potential heartache and future issues.
When Will You Need a Will?
You may not want to think about creating a will, because this forces you to acknowledge the inevitable. But, if you want to prepare your loved ones for this event, and you care about what happens to your children, property or assets – you need a will. At what stage in life should you think about drafting a will?
When You are Married
This may be the first time you consider creating a will now that you have a life partner. You may not think a will is needed now that you are married because everything should be passed along after you are deceased, right? It’s possible that your spouse will most likely be the beneficiary on any insurance policies, or retirement accounts, etc.
What about vacation funds, separate bank accounts, an inheritance, or some other small assets not jointly owned? If these are not spelled out directly in a will, you could spend more in probate fees to transfer over to the surviving spouse than the assets are even worth. To avoid this, a will should be made once you are married to ensure that your spouse will get all the assets you wish for them to receive.
You Have Children
It may be hard to imagine someone else raising your children, but if something happens to you and your spouse, you would absolutely want them to be in the hands of someone you trust. This is why you should designate someone in your will as the legal guardian – if your children do not turn 18 years old by the time of your death.
You may not know who to pick at this moment in time, but this is a vital decision that you need to make. It is best to identify which factors are most important to you. Some things you should take into account should be:
- Pick someone with a parenting style that you align with – educational standards, moral standards, temperament, etc. all must be considered.
- Pick someone who has a solid financial standing and can provide for your children.
- Don’t put a couple in your will, a divorce could happen, and this could potentially leave questions with who will be the primary caregiver in a split – identify one person from that couple if this is the route you decide to go in.
- Your pick could be a relative who lives far away if that choice is best for your child – make sure to include arrangements for your child or children to get to that relative.
You Are A Business Owner
Writing a will is extremely critical if you own a business, especially if you have a specific person or people that you want to take over. If you do not have a will with directions for the business, ownership could be given to your spouse or your closest relatives, regardless if that is the direction you were intending.
Some of the important questions you need to have answered if you own a business or are partners in business are:
- If you are partners in a business, you may want to set up a buy-sell agreement?
- Will your family continue the business?
- Who would you like to continue the business?
- What will happen with the business property (if any)?
You Have a Substantial Net Worth
If you have a substantial net worth, it is imperative that you direct your assets to exactly where you want them to go. You may have IRAs, 401K, Pension, or other retirement benefits – these should already have beneficiaries named. Nothing should be included in your will if there is already a beneficiary named (insurance policy, annuity policy, etc.).
There are many other things that lie outside of the aforementioned assets that you may want to designate specifically to certain people. These are just a few examples of assets that lie outside of the retirement type of accounts, and they could be extremely valuable as well.
The following should be documented in a will if you wish to not have a lengthy legal battle associated to the release and distribution of these items (amongst others):
- Real Estate
- Miscellaneous personal items
You Own A Large Amount Of Property
Perhaps you own property or several properties during your lifetime. Let’s say you also have a few children, grandchildren, other family members that you may want to provide specific portions of your property to.
If you do not have your exact wishes written out – they may not come to fruition. Some rifts in the family could definitely be caused if decisions are left up to the court, especially if the results are contested. It is best to explicitly state which property will be left to whom so that there will be fewer issues amongst the heirs.
When You Will Not Need a Will
Seemingly most people would need a will after certain life events occur, and after you start to accrue assets – but prior to this, not everyone needs a will, or at least just not yet.
You Are Young, Single, And Have Little Net Worth
When you are young, or single, childless, or with not many assets – it may be tough to justify establishing a will at that current moment. A will is an absolute necessity later in life when you have people who depend on you, or when your net worth starts to grow. So keep in mind that as you progress in age or responsibility, you may need to start a will if you wish to protect the assets that you have gained.
How To Make A Will
You can create a will for free on your own, work with an attorney or use an online service. Each of these methods has benefits or disadvantages associated with them – so let’s compare and contrast each of the avenues to see which one could work for you.
Make Your Own Will For Free
You can go online easily and find a free website that will guide you through creating your will. This is one route to go if you do not feel like paying for advice, or you do not feel like working through an attorney.
Who is this method for?
- If you have a simple distribution plan for your assets
- If you have a modest estate with only one or a couple of beneficiaries
- If you would like to establish a will without paying any fees
Work With An Attorney
At a particular stage, however, it gets complicated and could require professional assistance. It is suggested that you work with an attorney, particularly an estate planning attorney if your net worth is large and you have a lot of assets to account for.
Who is this method for?
- To have professional and updated documents as necessary
- If you want to make sure that your documentation complies with the law requirements
- If you want to correctly identify assets and beneficiary designations
Use An Online Service
There are a number of online services, with Trust & Will, for example, being one of them that can provide a similar service that a lawyer might also do, but more affordably. If you like the idea of assistance in planning your estate and creating a will, but do not want the potential large fees that come with attorneys, this could be for you.
Who is this method for?
- Someone who wants professional advice at a fraction of the cost
- If you want to be walked through the process of making a will so you can ensure that all information is accounted for and correct
- If you wish to not set up an in-person visit with an attorney or pay large fees
What Does A Will Do For You?
A will is essentially your instructions to how you wish to leave your assets. It provides written information on what you own, who the beneficiaries are, and what assets go where. Having a will can help your family eliminate legal battles, give everyone peace of mind, and most importantly – protect your hard-earned assets.
Eliminate Legal Battles
Without a will, the state can decide how to distribute your assets and to which beneficiaries. This could create a legal battle if the probate court decides some beneficiaries get assets that the testator (i.e. will maker) would not have chosen otherwise.
This scenario could allow next of kin relatives access to your estate – even if they have not been a part of your life. Contesting the will would surely take place in this scenario, and money will be spent in court unnecessarily. It is best to eliminate potential legal and family discord by creating a will that fits your intended wishes.
Protect Your Assets
You worked hard for a living and created a collection of assets, it is important to pass this on appropriately. No one wants to give everything they have worked for to the wrong hands. A will can protect your assets by handing them down to your chosen beneficiaries.
Give You Peace Of Mind
Having a will lets everyone have a little less anxiety and stress when a death occurs, at least a little less than necessary. Planning a will provides your family with peace of mind knowing your life’s work will be going into the correct hands. It will give peace of mind to your family knowing that you thought of them prior to your death – this can save them substantial time and money with a little preplanning.
Where There Is A Will, There Is A Way
If you want to provide a safe path to transfer your assets to your family, or chosen beneficiaries, then a will is necessary. If you have a wife, children, businesses, or a large net worth – you need to document where you want your assets to be distributed upon your death.
At a minimum, you should create an online will to get started. As you accumulate assets and have a larger net worth, it may make sense to use an online service or work with an attorney. These professionals can help you with avoiding legal battles, provide you with peace of mind for your beneficiaries, and help to keep your assets where you want them.