We all have people and things in our lives that we cherish and value. The well being of our children or other dependents is paramount. Some items may have come to use from parents or grandparents, possessing great sentimental value. As we work, save and invest, we build assets that provide security for ourselves and our loved ones. Yet we know that, someday, we will leave this life. How do we plan for that day, especially as it will affect the care of our loved ones or the allocation of our assets? A will is the first and most essential tool for providing peace of mind and continuity after we are gone.
The first thing to know if you do not set forth your wishes for the care of your dependents or the distribution of your assets, the state will. If you die without a will, you are considered “intestate.” Each state has laws covering the intestate distribution of property, and you can see your state’s provisions at http://www.mystatewill.com. These “one size fits all” laws may not reflect your wishes at all, but they will be enforced in the absence of a valid will.
Once you have committed to drawing up a will, take the time to consider what you want the will to do. If you have minor children, one of the main purposes of your will be to establish their care. Of course, if the other parent is living, he or she almost certainly will be the guardian, but what if that is not the case? If you do not name a guardian for your children, the court will chose one for you, most likely a close relative. Do you want your mother, or your brother, to raise your children? Naming the guardian in your will prevents any arguments among relatives as to who will be responsible for your children. Even if both parents are alive, naming a guardian is wise. Should you and your spouse die at the same time, who will be the best parent for your children?
Along with naming a guardian, you can establish a trust through your will to hold the proceeds of life insurance policies or other investments for the welfare of you r children. Simply naming your children as beneficiaries of your policies or investments is not enough. Money inherited by minor children cannot go to them directly. Using the will to set up a trust and name the guardian as trustee simplifies the process and ensures that your wishes are carried out.
Even if you do not have minor children, a will is essential. The document may be as simple as a “sweetheart will,” in which each spouse gives everything to the other spouse. Yet the possibility remains that both spouses may die at the same time, and secondary provisions can be set forth in a will to cover such a circumstance. Without the will, a surviving spouse would most likely still get all the significant assets, but the process of taking the case through the court will be costly and time consuming.
In the event that you have assets that you do not wish to flow directly to a spouse, or if you are unmarried, a will allows you to dictate specifically who will be your beneficiaries. The totality of your assets is called the estate. A will permits you to make specific bequests out of the estate. These directives provide that a specific amount or percentage of money or assets, or a particular item, go to a certain individual. If you wish one thousand dollars to go to your nephew, or your mother’s necklace to go to her sister, a will can ensure there are no arguments about it after you are gone.
Once specific bequests are taken care of, the remainder of your assets, called the residue, can be divided according to your wishes. Through your will, you can give all he residue to one individual, or provide that certain percentages be provided to a number of people. It is possible to state that you do not wish a particular person who might otherwise have been considered an heir, such as an adult child or sibling, is to receive nothing through the will.
Individuals are not the only potential beneficiaries of a will. You may name charities, religious organizations, or any other legally recognized group as a beneficiary. Such groups can be provided a specific bequest or be given a portion of the remainder. None of your assets will go to such groups of the court must decide the distribution of your assets through the intestate process.
It is also possible to establish trusts through your will that benefit groups or individuals other than your children. By providing for the funding of such trusts through your will, you may be able to keep certain assets beyond the reach of creditors or other claimants.
There are sites on the Internet, such as http://www.legalzoom.com and http://www.doyourownwill.com , which enable you to draft your own will, be careful! Such sites may not be your best choice if you wish to include the creation of trusts in your will or if you have complicated finances. Also, each state has its own rules about how to execute a will, whether with a notary public or witness, or both. Given the great importance of getting a will done correctly, it always is wise to consult an attorney.
Photo courtesy of Elizabeth Buie