Preparing a will may not be on everyone’s to-do list, but it should be. In truth, the biggest mistake most people make with their will is not having one. Sadly, statistics show this seems to be a common trend, with almost 63% of Americans indicating they do not have a will.
However, if you are one of those individuals who does not have a will, it does not mean all hope is lost. In this blog post, we will go over everything you need to know about wills and the four things you need to be aware of before preparing one.
What Happens If You Do Not Prepare a Will
If an individual does not have a will when they die, they will die intestate. This means that the court will go through a lengthy process to determine who the deceased’s rightful heirs are and where the things they own will go. However, when these major life decisions are left to the court, more times than not, the result may not be what you wanted for your family.
Yet, if you have any property such as employer-sponsored retirement plans, IRAs, life insurance policies, and other payable on death accounts, these properties will automatically pass to your named beneficiaries. Additionally, any financial accounts or real estate holdings that are titled jointly with a right of survivorship will typically become the property of the other joint owner.
What Is a Will, Exactly?
A will is generally defined as a legal document that will allow an individual to:
- Assign someone to manage their estate after they die
- Declare who will become a guardian of their children
- Assign specific items or property from their estate to another person
Generally, the person you name in your will to manage your estate is referred to as the executor, but in some states, they can also be called the personal representative.
Creating a Will—What You Need to Consider
The best thing you can do when creating a will is to prepare in advance. Not only will this make the whole process more manageable, but it can also give you peace of mind when the process is completed according to your wishes.
That is why, before preparing your will, you should consider the following:
Figure Out the Executor or the Personal Representative
The first thing you will want to figure out is who you will name your executor or personal representative. This is an important decision and should not be taken lightly, as this person will be in charge of handling your whole estate and should be someone you trust implicitly. You will also want this individual to be well organized since there is often a lot of paperwork that goes into administering an estate.
For these reasons, before making any decisions, you will want to speak with the person you have in mind and make sure they are willing to accept this position. If they accept, discuss with them where to find your most important documents, passwords, and online financial account information.
Figure Out What Property You Own
You need to remember that a will covers both personal and real property, so you will want to create a detailed list indicating everything you own, including:
- Family heirlooms
However, it is also important to note that you can only pass on property that you own, so if something is owned jointly, you will only be able to share your portion of it upon your death.
Figure Out Your Beneficiaries
Next, you need to decide who are the people who will be inheriting your property. These individuals will be known as the beneficiaries. Often, beneficiaries are the people closest to you, but you should also consider other individuals in case something happens to those you had in mind. For instance, you may want a backup plan if a situation arises where you and your spouse pass away at the same time.
Figure Out Who Will Create This Will
Although there are plenty of avenues for you to choose from to create a will, it does not mean that every option is the right choice for you. To have an enforceable will, you need to make sure that it is executed according to the state’s laws. Otherwise, if anything is missing, it can make your whole will invalid.
Generally, to ensure that your wishes are correctly communicated and the documents are prepared according to the regulations, it is best to speak to a knowledgeable estate planning attorney. Not only can the lawyer’s sound legal advice help you navigate the complexities often involved in this process, but they will ensure that everything is done properly and according to your wishes.