(Recorded on 10/19/21) Topics covered on this video coaching call On this week’s live coaching call, we are joined by financial advisor Mike Mitchell to discuss a powerful macroeconomic planning process that can help you create measurable financial strategies to...
Many adults do not understand why setting up a will should be a priority for them. We will help clear up this confusion with 4 reasons to get a will now.
4 Reasons to Set Up a Will Now
The first document in any good estate plan is a will, which is often said to be the cornerstone of any estate plan. Most adults should have a will, even if you do not have children or much money to leave behind. Inevitably, everyone has at least a few wishes upon their passing, and a will is a legally binding document in which you may express those wishes. Here are 4 reasons for setting up a will now:
1. Determine who gets your stuff. The main purpose of a will is to disburse property to heirs after your death. If you don’t leave a will, disbursements will be made according to state law, which might not be what you would want. Furthermore, you do not want your family members arguing over who is supposed to get your stuff at the moment they are grieving the most. You may tell your husband that you want him to have your diamond jewelry at your death, but your sister may claim you told her the same thing. These types of squabbles can become messy if not taken care of beforehand in a simple will.
2. Name the executor of your wishes. You can name the person (executor) who will manage and settle your estate. Choose someone you trust because they will have the sole responsibility of carrying out your wishes. Also, make sure you ask them in advance if they will be able to handle the responsibility, especially if you have a more complicated will. Then, go ahead and review the will with your executor to make sure they understand their role upon your passing. If you do not name someone as executor, the court will appoint an administrator, who might not be someone you would choose.
3. Choose who will take care of your children. This is probably the most important aspect of a will to most people. You can name a legal guardian for minor children or dependents with special needs. As in the case of naming the executor, be sure to ask the named guardian if he or she is willing to accept the appointment. If you don’t appoint a guardian, the state will appoint one for you. (Are you getting the theme here?? If you don’t make a will, the state has one for you!)
4. Share your personal wishes upon death. You may also want to include a letter of instruction, also called a testamentary letter or side letter. It is an informal, non-legal document that generally accompanies your will and is used to express your personal thoughts and directions regarding what is in the will. This may include such items as your burial wishes or where to locate other documents. This can be the most helpful document you leave for your family members and your executor. Unlike your will, a letter of instruction remains private. Therefore, it is an opportunity to say the things you would rather not make public. A letter of instruction is not a substitute for a will. Any directions you include in the letter are only suggestions and are not binding. The people to whom you address the letter may follow or disregard any instructions.
Keep in mind when setting up a will that it is a legal document, and the courts are very reluctant to overturn any provisions within it. Therefore, it’s crucial that your will be well written and articulated, and properly executed under your state’s laws. It’s also important to keep your will up-to-date. The following are circumstances upon which you will want to review your will:
1. Relationship Change (marriage, divorce, birth of children, etc)
2. Asset Changes (substantial changes in asset values)
3. Location Change
4. Death in the Family (perhaps your executor, guardian, or beneficiary has preceded you in death)
5. Tax Law Changes
6. Children Reach Age 18 (or age 21, if they are to become the beneficiaries)