Writing a will, also known as a last will and testament, involves answering a lot of big questions. The answers will no doubt affect your family, friends, and loved ones. When you pass, those loved ones will experience stressful times. An effectively executed will can greatly reduce the stress around the question: who gets what? Planning how your final estate is handled can be difficult. The goal of this article is to expose you to some concepts in estate planning and help you answer those big questions.
What is a will and testament?
A will is a legal document that details how you want your “things” to be distributed after your death. A will can express who is to manage the assets until they are in control of the receiving party at its final distribution. Likewise, a will can contain instructions for guardianship over a minor child or other dependents.
Terms to know when writing a will and testament
- Testator - the person who makes a will
- Estate - the property owned by the Testator at death
- Executor/Executrix - the person/persons appointed to manage the estate
- Beneficiary – the individual or party who receives property from the testator’s estate
- Probate – the legal process where a court examines and approves the terms of a will (usually exceeds 6 months)
- Guardian – person/persons named by the testator who will be legally responsible for the care of the testator’s dependents following their death
- Intestate Succession - the distribution method of the estate for a person that dies without a legal will; the deceased’s assets then become the responsibility of the probate court
Why should you consider writing a will or testament?
It’s easy to postpone writing a will since it isn’t the most exciting process. Thinking about life after you are gone is naturally difficult. However, your loved ones need you to do just that. A will may be the most important financial document you ever make, as it has the power to eliminate potential conflict.
Accidents happen every day. Writing your will can mitigate financial worries for your family, friends, and loved ones. If you die without a will, you die intestate. When this happens, the state laws of intestacy will determine how your property will be distributed. Even if you have a perfect understanding of intestacy, it is not advisable to depend on this.
When should you write a will?
Anyone over 18 years old should consult with legal counsel to learn more about writing a will, especially if you have dependents relying on you or your income. Here are some life stages when it becomes even more crucial to create a will if you haven’t already:
- When you get married
- When you buy a home
- When you have children
- If you own your own business
- When you have accumulated money or other assets
Myths about writing a will
- Only the wealthy should have a will
Not true. This statement is often used as people attempt to justify their lack of financial readiness. A will can protect your wishes regarding your assets no matter the value of your estate.
- My debts go away when I die
While it’s true that some of your debts may resolve after death, that is not true for all debts. Your assets may be liquidated to pay off any remaining debt. Having a will allows you to specify which assets are used to pay your final debts. Having proper life insurance is also a crucial step to making sure your debts are handled following your death.
- I already have a will, so I’m good
Half-truth. It’s not a make it and forget it kind of thing. If you’ve already created a will, great! But just as life changes, so should your will. Every 3 to 5 years, schedule time to review your will and make sure nothing should be revised.
Financial planning is also an important part of life. Creating your will is the best way to express your last wishes for your loved ones. So, ask yourself the big questions and answer them. Don’t forget to ask yourself, “do I have adequate life insurance to help my loved ones deal with their own big questions when I die?” Contact one of our local agents for a free life insurance quote and talk to a financial advisor or attorney to get started today on answering some of those big questions!