Planning for the Future Includes After Death
A will, also called a last will and testament, is a legally binding document that explains your wishes regarding the distribution of your property and assets after your death. And you don’t have to be a millionaire with a large estate for it to make sense to have one. After all, a will does more than ensure the right nephew gets your collectible figurines—the ones you know only he loves as much as you do.
Benefits of a Will
Smoother Probate. If you don’t have a will, after your death, the court system will make all decisions regarding assets (including bank and investment accounts, property, valuables, and pet and child care) through the probate process. All estates must go through this process, but with a will, it’s faster, less painful, and less stressful for loved ones.
Small Business Security. If you own a small business, a will helps expedite the movement of assets to living shareholders.
Inheritance. Your possessions probably also hold sentimental value to specific family members or friends. You might be very close with a particular sibling or cousin and wish for them to receive a portion of your estate that the courts would not recognize nor honor without a will. It’s ok if relationships and circumstances change; you can always go back and update your will.
Disinheritance. You can think of a will as an investment in family members and any other beneficiaries of your will. But did you know you can also disinherit someone who would otherwise stand to inherit part of your estate if it were left up to the courts?
Estate Taxes. There are tax benefits to having a will, as it allows you to minimize your estate taxes (the taxes owed to the government based on your estate’s value). The value of what you give away to beneficiaries will reduce the taxable value of your estate.
Pets and Minors. In your will, you can outline who will be custodians of pets and underage children.
Charitable Gifts. Your family and the court system may not know that you wish to leave a donation to a charity, institution, school, or other organization that is important to you. A will can ensure your support of a treasured cause continues.
Steps to Creating a Will
Most people can create a sufficient will using software or an online service like Quicken WillMaker Plus, Rocket Lawyer, or Legal Zoom, which should also allow you to create a living will, living trust, bypass trust, financial power of attorney, and other important legal forms. If you have a more complicated estate or don’t want to use software, consult an estate attorney, who may also work with a Certified Public Accountant (CPA) or financial planner.
Once you have a will, remember to revisit it and ensure it represents your current wishes and assets. Lastly, be sure to keep your will in a safe location, such as a safe at home (with someone who has the key or knows the combination!) or a safety deposit box.