There are only two things in life that are certain, as the saying goes: death and taxes. While there are ways to limit the amount you’ll pay in taxes, all the miracles of modern medicine aren’t going to allow you to cheat death. The best you can do is to be prepared so that when you do die, your family is well-positioned. One estate planning option is to write a will, which is a legal document directing what will happen to your estate.
What Is a Will?
A will is a legal document detailing your last wishes, specifically those regarding the distribution of your possessions and the care of any minors. It can contain a number of different directives, but it generally will include at least the following information:
Having a will can make things easier for your family when you die, but it won’t save them from the probate process. This is a court-supervised process that authenticates a person’s will, assesses the individual’s assets and then distributes those assets to the person’s named beneficiaries. You’ll need to form a living trust to avoid probate, though you’ll also likely still need a will.
Conventional wisdom says that only people who are older or wealthy need to create a will or worry about estate planning. However, even people who are young and have modest amounts of assets should have a plan for when they die. This is especially true for people who have children who they want to ensure are properly cared for.How to Make a Will
There are a variety of ways to make a will. The most simple option is to write it yourself, which you can do in a truly free-form manner. Simply write down what you want to happen to your estate. There are also online templates available that can provide a basic format to follow, allowing you to just fill in the blanks. You can also buy a computer program to help you.
Another option is to hire a lawyer to assist. Complicated estates often benefit from a lawyer. If you are dividing your assets among a big group of relatives, for instance, hiring a lawyer is a good idea. Similarly, if you have a complicated set of assets — multiple homes and mortgages or lots of money tied up in investments, for example — a lawyer can prove useful. Lawyers can also help if you want to disinherit a child or spouse or if you are worried that someone is likely to challenge your will in court after you die.
Doing it yourself has the obvious plus of being free. Buying a will-writing program has a cost, and hiring a lawyer is the most expensive option. Regardless of which method you choose, you and two witnesses typically must sign the will. No states requires notarization, though that may expedite the probate process.What a Will Cannot Do
There are some things a will simply cannot do, including:
There are some common mistakes that you should avoid when writing a will. The main misstep is failing to pay attention to the rules. The rules surrounding wills are different in each state, so make sure you are considering rules regarding age limits, witnesses and other regulations.
Another common mistake is choosing a bad executor. The executor is the person who ensures your wishes are carried out, so make sure it is a competent person you trust. You’ll also want to be sure you name a guardian. If you have minor children, you’ll want to choose someone to care for them in the event you’re gone.
Last but not least, don’t forget to update your will. As you get older, your financial and personal situation will change. Make sure you update your will to reflect that.The Bottom Line
A will is a legal document setting up your estate and directing what happens with your property and assets after you’ve died. Wills can be simple, with one beneficiary for everything, or complicated, with many beneficiaries. There are a few things a will cannot do, including creating a plan for your funeral and final arrangements. Writing a will by yourself is possible, but it’s a good idea to hire a lawyer if your estate is complex.Estate Planning Tips
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