Your Last Will And Testament: 5 Reasons It’s A MUST Have
If you’ve worked with me, you may have heard me discuss the importance of having a will even if you don’t have much to leave behind (or a regular income). Hopefully, a will will provide you with peace of mind and provide a sense of relief during this time in your life.
Perhaps you are thinking, “I’ve barely begun my journey blogging, and I have no income.” That’s true. However, even on the internet, you will start to build a network of friends and acquaintances over the years. Some of those relationships will develop into close friendships. You may want to keep a copy of your will in your social media’s account—just in case.
Creating your will NOW will also increase your chances of being prepared for the next stage in your life. If you have a will already drafted, you have time to update it as your life changes. Here’s why – in just two years, I’ve had a child, my husband has been promoted, and I’ve opened my own LLC. None of these circumstances were factors in my first draft of the will.
Reason #1: Most People Don’t
Reason #2: It Puts You In Control
As we’ve discussed, having a will in place makes everything easier for someone else to take over. They don’t have to deal with any red tape, waiting periods, or other mandatory holds while they float pointless guesses about your intentions.
Aside from costs and time, going through a will is frustrating. You wouldn’t want your last wishes to cause someone you care about undue stress.
As executor (person responsible for following your last will and testament), I can say that dealing with unqualified people making decisions is the least favorite part of my job. It’s not for me to decide who’s going to get an inheritance.
It’s your will. Keep the ball in your court.
Reason #3: Your Family Won’t Have to Skimp on Your Medical Care
One of the most important reasons to get a will is that it helps to manage your family’s finances after you’ve passed away. Without a will, your spouse and next of kin will be saddled with the job of ensuring that your final wishes are carried out. Probate is a complex procedure and it’s expensive for your family.
If you’ve made your will before you were married, it may specify who should inherit what. If you’ve not made a will, your spouse could be disinherited. As a result, your children won’t see as much of your estate as you had intended. Without a will your family may also end up having less money available for your medical bills than they otherwise would if you had provided for survivors ahead of time. In both cases, your survivors will end up having only as much of your estate as the will or probate court allows them.
Reason #4: You Can Prevent Any Financial Uncertainty
Fear of getting called out by family members is one reason that a lot of people become a little leery of writing a last will and testament after having children. After all, it’s hard to write about your own death. You can’t help but think about what will happen to your kids without you once they find your last will and testament in your belongings.
However, it’s really important that you write one anyway. There are several reasons why, but the key is to remember that you’re not writing a last will and testament to be mean-spirited or even to be spiteful. You’re doing it for your children.
The law states that if you have a spouse—or partner—and children, then your spouse is the guardian of your children. In the event that you die, the court will look to your spouse or partner for support to make sure that your children are provided for. However, if you’ve never mentioned your spouse or partner in your will, then the court will look to your parents or other family members for support. Again, this can lead to a lot of financial uncertainty for your children.
Reason #5: Your Children Won’t Be Burdened
If you want to leave your heirs unencumbered by your past debts, you have to take care of this yourself. If you live in a community property state, you need to make sure that your spouse is not included in the beneficiary list of your bank or credit union accounts and insurance policies.
Having made your wishes clear to the person in charge of your finances and completed your last will and testament, it’s necessary to update your beneficiary list. This will ensure your loved ones will not be exposed to any complications.
When Should You Use a Living Trust?
The experience of traditional estate planning can be a confusing and intimidating experience. The cost of hiring estate-planning lawyers and accountants can add up quickly, and more often than not, it’s an experience you don’t have to face. But even if you do, you can rig things in your favor by having a special strategy in place: a strategy that goes beyond the traditional estate planning techniques.
Because it’s a trust, you can call them self-directed living trusts, and they’re typically used for two purposes. First, you can use these living trusts to plan how your estate is going to be distributed after you die. This type of trust is also used to avoid probate before your death; in most cases, the assets in a living trust are transferred to your beneficiaries without the need for lengthy will probate proceedings.
Second, these types of living trusts can provide you with protection from undue taxation by helping you to qualify for specific exemptions in your estate plan. In essence, if you’re looking for an easy way to reduce taxes, then you’ll want to take a look at these trusts. They’re a common estate planning tool used in tax reduction strategies.
How to Name Your Trustee
A trust needs someone to oversee the assets of the trust, generally referred to as the trustee, and act on the directions of the person who set up the trust, generally referred to as the trustor (or settlor). The person named to be the trustee is one of the most important steps in creating a trust.
If you don’t name a trustee, or you name someone who dies before you die or who cannot act on the trust, then the assets of the trust will have to go through probate. That’s not what you want.
What Can You Put in a Living Trust
Spouses and Domestic Partners
You may name your spouse or domestic partner as the executor of your estate. If your spouse or domestic partner cannot properly execute the duties of executor, that person can choose a co-executor. When naming someone other than your surviving spouse or domestic partner, you’ll want to make sure and specify that co-executor in the event your surviving spouse or domestic partner passes away after you, but before the will is probated.
Wills vs. Living Trusts: What’s the difference?
When you die, your assets will transfer to your heirs using a will or trust. The main difference between the two is who controls your assets should you pass away.
What Happens When You Die Without A Will or Trust?
What Does a Will Really Do?
If you die without a will, you don’t die… you die broke. Dying intestate (without a will) is the equivalent of leaving your worldly possessions to chance. Overall, less than half of Americans have a will, and if you are not one of them, you will legally become intestate.
The purpose of a will is to provide for the disposition of your real property (house, land, etc.) and your personal property and assets (car, jewelry, etc.). For example, if you marry someone after they owed you money, you do not want to leave your money to that person outright. Instead, you could leave it to your spouse. Or if you have children from previous marriages, you could leave it to them. Your will can dictate all of that.
Executors of your estate are appointed to carry out the provisions of your will. This is the person in whom you place your trust to manage your assets after you die. It should be a trusted family member or a trusted friend. They will assist your beneficiaries in distributing your assets according to your will. A good executor is one who is honest, organized, and good with details. If you have no one that you think would make a good executor, consider contacting a lawyer or an accountant to help you out.
Are There Repercussions of Dying Intestate Between States?
The laws for dying intestate vary by state, but there can still be repercussions. If you die without a will, everything that you own will be distributed according to a predetermined set of rules set out by state law. Some states distribute your assets based on who inherits from you according to the last will and testament, if you have one, while other states distribute your assets according to a set of intestate succession laws that do not require a will.
What About Other Circumstances
You’ll need to plan for unexpected events. To do so, you have to review your plan on a regular basis.
There are certain events that can cause the death of your loved ones before your last will is properly executed. These incident rarely occur but they do happen. Some examples are natural disasters, fatal accidents and other situations beyond your control.
The thing you can do to minimize the effect of these events is to appoint an executor. This person will be in charge of settling your last will and order the distribution of your estate after your pass away.
However, if the executor dies or is unable to fulfill his duty, any surviving members of your family, like the spouse, can take his place.
And if there isn’t any surviving member of the family, the courts will appoint an individual (in some cases, an attorney) to execute the estate.