The following is a guest post from Andrew Martin. He will return with another guest post next week entitled, “Is a Family Trust Right For You?”
It is never pleasant to think about the need to make arrangements for your death, especially when you are relatively young. But if you neglect to clearly state how you would like your assets and property to be distributed after you die, your intended beneficiaries may not receive the inheritance you have worked so hard to provide them with.
A will is the easiest way to ensure your assets are distributed according to your wishes. They are inexpensive to create, and the peace of mind they provide is invaluable. In spite of this, a shocking number of Americans don’t have a will.
According to a survey conducted by PNC Wealth Management, approximately 30% of adults whose assets exceed $500,000 do not have a will. In addition, a Harris Interactive survey conducted for Lawyers.com indicated that 58% of adults across the country haven’t created a will.
The Importance of Having a Will
These statistics make it clear that a vast majority of the general population doesn’t understand the importance of having a will. It is an important document that everyone should have, at all stages of life, regardless of whether or not you have a lot of money.
If you die intestate (the legal term for not having a will at the time of your death), your assets will be distributed according to the laws established by your state. These laws don’t evaluate your unique individual circumstances or make an effort to determine what your true wishes are. As a result, it is likely that your intended heirs may not receive their proper inheritance.
By creating a will, you will be able to take control over who receives your assets after you die. A will can address a wide range of issues, including:
- How your assets and property will be distributed
- Who will act as executor of your estate
- Who will care for your minor children
- Directives about your funeral or burial arrangements
Regardless of your age or the size of your estate, there is no reason to give up control over these decisions.
Appointing an Executor
One of the most important directives you can make as part of your will is the appointment of your executor. This person will manage your estate and handle your arrangements after you die. By naming an executor in your will, you can ensure the person who performs this important task is someone whom you trust and believe is capable of handling this job.
If you do not have a will, the role of executor may either be performed by a stranger designated by the state or someone who is first in line legally, but who you may not completely trust or believe to be competent. The ability to name an executor prevents these scenarios from arising.
There is another important reason to maintain control over who is appointed executor of your estate. When the state designates a stranger to serve as executor, that person is entitled to collect fees for carrying out this duty. As a result, there will be less money to distribute to your desired beneficiaries. The executor you choose in your will can waive these fees, maximizing the inheritances for your heirs.
Maintaining Control over the Distribution of Your Assets
You’ve worked hard all your life. Don’t you want to know that the assets and property you’ve acquired will be distributed according to your wishes? Without a will, your assets will be distributed according to the laws in your state, making it impossible to ensure your intended heirs receive their rightful inheritance.
This is particularly impactful in situations where you get remarried and have children from your prior marriage. By creating a will, you can ensure your children receive the portion of your estate that they deserve. Otherwise, your new wife may be entitled to a large percentage of your assets, even if you were only married for a few years.
In your will, you can also make specific gifts of cash or property to whomever you choose. As a result, you can ensure your daughter receives your nicest jewelry or your favorite artwork goes to the person who would appreciate it most.
Having a will is also extremely important in situations where you want to leave assets to a partner you’re not married to. The intestacy laws in many states do not recognize unmarried couples as having the same rights as a spouse. As a result, your live-in partner for more than 25 years may not receive anything even though you built your lives together and deserves the same inheritance benefits of a spouse. If you create a will, you can avoid this situation.
Providing for the Care of Young Children
If you have young children, creating a will is one of the most important things you can do. In your will, you can make provisions for guardianship of your children in the event that both parents die together in a common disaster. Beyond appointing the people to raise your children, your can also cover just about every aspect of your children’s care, including:
- Making provisions for setting up a trust for minor children
- Establishing who will manage the trust for your children, ensuring that your children’s money is properly managed and not squandered
- Placing directives on how you want your guardians to raise your children – this can cover issues such as religious education, extracurricular activities, or the desire to send your children to top tier colleges if they can get in
Working with an Experienced Wills and Trusts Attorney
Wills should always be carefully and thoroughly thought out, and not drafted haphazardly. There are many issues to consider when creating a will, and it is important to work with an experienced wills and trusts attorney who can guide you through this process. By doing so, you can ensure that your loved ones are properly provided for when you’re gone.
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Bio:
Andrew Martin is a professional writer with over five years of experience writing legal copy. He is also a musician and regular contributor to the Marquee Magazine, an online and print publication covering music in the Boulder and Denver area.
I can say from experience that having a will makes a huge difference. I am was the sole heir and it still helped tremendously when my mother passed away. My wife and I need to update our will, now that our son is born……but we have yet to agree on who should care for him if we died.
Still, given the relatively small cost for a will and trust, $750 in my case, laziness is the only excuse.
-Bryan
Income Surfer recently posted…Failing to Plan Means Planning to FAIL
Yea, the guardian thing seems to be a big impediment to many parents. My wife and I will have to discuss that too.
Our family is in the process of finalizing a living irrevocable trust. In my opinion, everyone with a decent amount of assets and/or has kids should consider a will. It not only protects your assets from probate but helps simplify things for your surviving family members. After all, while grieving your death, the last thing they probably want to do is deal with family members fighting over who gets what. Help them avoid that and lay it all out in advance. 🙂
A Frugal Family’s Journey recently posted…Mortgage Balance (Update) – June 2014
Why an irrevocable trust versus a revocable trust? Tax implications I assume? Helping family members avoid infighting which occurs very often in these situations is very important.
I draft wills for a living, and I still don’t have one! My husband and I can’t agree on a guardian 🙁
Rebecca @ Stapler Confessions recently posted…June 2014: We Increased our Net Worth by $3,000
Thanks for sharing Rebecca! I’m an attorney but don’t draft wills for a living…and I was bit ashamed to say that my wife and I don’t have a will. It seems that not being able to agree on a guardian is a common issue! What do you tell your clients to do?
I think it’s hard to argue that you SHOULDN’T have a will, so yeah, I think everyone should.
DC @ Young Adult Money recently posted…What’s the Most Cost Effective Trip: Cruise, Road Trip, or Plane?
Let me play Devil’s Advocate then…not a big reason, but sometimes it seems unnecessary. If you’re fine with where your assets go if you die intestate (without a will) then I guess there’s no need!
Even if you have a living trust, you need to have a “pour over” will that covers smaller items you own like a car or something you acquired but didn’t title to the will. Most good estate attorneys will recommend you have this as well as the trust. One thing to mention is that you shouldn’t put your funeral preferences in a will since it is usually read/probated after the funeral. A separate letter to whomever you named as an executor, or at least a family member should spell out these wishes.
Great point and I think that will be covered in the next post about trusts. And another good point about funeral preferences…I didn’t think about that. Thanks for sharing that info.
I am in the process of setting up a will and trust. Great timing. I look forward to the next post too.
No Nonsense Landlord recently posted…How to Collect Rent On Time
Good to hear. Hope the next post will be useful and informative for you.
I’ve thought about will’s on occasion but I’m still on the fence about if I really need one or not. I’m single, I have no dependents, the majority of my assets are in my retirement and brokerage accounts where I have named my brother and sister as the beneficiaries on it with equal percentages…. I have some other assets such as my car, some artwork, but in the grand scheme of things that’s only a tiny fraction of assets which I am guessing would default to my parents for the time being.
I guess I don’t see the point yet for someone in my situation to need to spend $500 to get a will drawn up when at this point I honestly don’t care who gets anything. My brother and sister get my nest egg, and that’s really the only thing that has significant value to fight over. My car that’s worth maybe 8k is insignificant to the hundreds of thousands in my various retirement accounts.
I haven’t heard an argument that makes me want to care about this yet (though I’ve been looking for one).
Zee @ Work-To-Not-Work recently posted…Learning From Our Mistakes: How to Kill Zombies
Based on your situation, it’s probably not that crucial for you to have one. You’re right that a lot of your accounts have named beneficiaries so it wouldn’t have to go through probate.
I used to work in the mortuary industry and learned a lot about proper estate planning during that time. You don’t have to have a will, but it certainly makes things easier for your survivors if you do.
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Still find it surprising that you worked in the mortuary industry! But you’re right that not having a will is not necessarily always a problem…though there are also many situations where a will would save the survivors from a lot of stress and anguish.
I panicked for months after my son was born that we didn’t have a will in place. I never thought about it before that, though. I just had nightmares of him being taken away by social services or something like that. Anyway, I am glad that we have one in place, specifically because we have spelled out our health care wishes as well through the will writing process, so I feel as though we are covered and my son is protected.
Shannon @ Financially Blonde recently posted…Music Mondays – Father and Daughter
Good idea, the health care proxy is good thing to take care of too.
Now that we have children, we definitely want to make one!
Yea, we should take care of it too!
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Hey Buddy,
Great Post,
Its very true that we should always plan for the distribution of our assets and estate in our living state. Its really smart move as it will make the distribution according to our wishes.
Through this post you have made it very clear that its important to have a will whether you posses lot of money or not . As this is the great misconception among the people that why would they need a will if they don’t have much in their accounts.
Thanks a lot for sharing this post and Keep sharing!!!
John R. McDonald recently posted…The Importance of Updating Your Estate Plan