New Year's Resolution: Write a Will
New Year's Resolution: Write a Will
It's simple. Most of us want our wishes carried out after our death. And having a will is a good way to ensure that the family silver winds up in the right hands. In short, a will is a legal document that tells the world how you want your assets distributed after your death. But don't worry—in the meantime your wishes will remain private. No one has to know what's in your will until after you're gone.
Every adult—whether they are wealthy or not—should have a valid will. Yet, over half of all Americans die without one. In fact, national estimates project that 70% of American adults currently don't have a will. The reasons for this are common. Many people think they don't have enough property to worry about or that writing a will might be too expensive. Others simply prefer not to think about the subject at all.
The truth is drafting a will is neither difficult nor expensive. And contrary to what most people think, it doesn't require an attorney to write one. Let's take a quick look at the process of creating a will, beginning with what happens if you decide not to.
Dying Without a Will
If you die without a will, what does this mean for your belongings? Most states have a system for distributing assets at death. As you might guess, surviving spouses and children usually get top priority. Family members like parents and siblings may also be entitled to a share of the pie. However, every state's laws are different.
Be advised, though. If you die without a will and have no surviving spouse, children, grandchildren, parents, grandparents, siblings, aunts or uncles, your entire estate may go to your state government.
If your state's distribution laws work fine for you, does that mean you shouldn't write a will? Well, not exactly. After all, having a will takes the guesswork out of who will receive what. And why not help to avoid potential family feuds over where your property will go?
OK, I Really Want to Write a Will...Now What?
So, you're ready to get started on that will. To eliminate surprises, here are a few things that are typically included:
Statement of Last Will and Testament: Your will should state that you're of sound mind and that you intend this document to be your last will and testament. Also, the will should state that it overrules any previous wills.
Executor: The executor is the person who will oversee the distribution of your assets after your death. If you die without a will, the court will select an administrator to perform the duties of an executor.
Minor children: If you have minor children, a will enables you to select a guardian and a trustee to manage their affairs. Without a will, a court will appoint a guardian and/or trustee who may not be your first choice. Remember, if you decide to select someone other than the child living parent as a first choice, you may want to explain the reasons just in case the living parent challenges the will.
Personal Effects: Any items that you want certain people to have should be detailed in your will. For instance, you may want the family photo albums to go to a reliable cousin or an antique pearl ring to be handed down to your daughter.
Pets: Ah, trusted members of the family. Unfortunately, state law defines them as personal property. That's why you may want to name a caretaker and even leave money to your pet's guardian for the animal's future care.
Debts and Taxes: Your will can instruct the way you prefer your debts and taxes to be paid. In addition, you might want to leave contact information for assets such as an IRA, insurance policy or employment retirement plan.
After Your Death
A court oversees the distribution of your property whether you have a will or not in a process called probate. The will is first authenticated and then the deceased's assets are collected. Once the debts and taxes paid, any remaining money is distributed according to the will.
The process ends with an audit when the court approves the executor's accounting and distribution. The audit prevents people from coming forward later to claim they should have received something from the estate.
Remember, you can cancel or rewrite your will at any time before your death. What you decide now doesn't have to be the truth forever. In fact, you may want to revise your will after any major life events like marriage, divorce, moving to a new state, the birth of a new child, or the death of loved one. There are a number of reliable, low-cost online services such as LegalZoom.com that can help you prepare and even update your will from the privacy of your own home.
It's also a good idea to review the beneficiaries you've listed for your 401(k), IRA, pension, and life insurance policy because these accounts are automatically transferred to your named beneficiaries when you die.
Once you have completed and signed your will, make sure it's safe and accessible. You might even want to let another person, like the executor, know where to find it. Good locations for your will include a fireproof safe or a safety deposit box. Just make sure you know your bank's policy about accessing the box after you die.
Having a will not only provides clear guidance for your loved ones after your death, but it also allows you to rest easy, knowing your wishes will be carried out. The peace of mind you gain will be well worth any expense or effort involved in drafting a will. After all, we all want to take care of our loved ones. Writing a will is one way to make sure they're cared for even when you're gone.