Yes, you do!
A will is an essential component of end of life planning and everyone over the age of 18 should have one.
But despite the obvious importance of this document, only 44% of Americans report having a will (according to 2016 Gallup poll). If you belong to the large majority of people without one, you should know that dying without a last will and testament (also known as dying “intestate”) means that the state decides how your assets and property should be distributed upon your death.
Do you want the courts deciding who gets your prized possessions? Don’t let this happen to you – write a will now!
What is a will?
A will is a legally binding document that expresses your final wishes on how your estate should be distributed when you die. In addition, a will allows you to name a legal guardian to look after your minor children upon your death.
What’s included in a will?
- Beneficiaries – even if you don’t own much in the way of assets, it still makes sense to choose beneficiaries of your estate and name them in your will.
- Common beneficiaries usually include immediate family members such as spouses, children and grandchildren, other relatives, close friends, and entities such as churches, universities and nonprofit organizations.
- After your death, your beneficiaries must be informed of their full inheritance as specified in the will but they don’t necessarily have the right to know what assets/cash/property other beneficiaries receive.
- Executor – the executor is responsible for carrying out your final wishes as set out in your will. They distribute assets and property to the named beneficiaries and perform estate management duties, e.g. pay off debts, file taxes, etc. Being an executor isn’t an easy job so choose someone you can trust – a person who is honest, fair, and organized. Also, have an alternate in mind in case your first choice says “no thanks.”
- Assets/Property – writing a will helps you plan ahead and get your affairs in order. Start out by making a list of all your assets and property so that you can determine what to leave to your beneficiaries and how much of it they will inherit – this can include real estate, land, bank accounts, stocks, royalties, jewelry, family heirlooms, and anything else of value.
- Legal guardian for minor children – if both parents die without naming a legal guardian to look after their minor children, this responsibility is left up to the courts. To avoid having the state decide who gets physical custody of your children, select a guardian and personally inform them of your decision before you make it officially known in your will. Choosing another person to raise your children is a difficult decision, but one that all parents must make.
How much does a will cost?
It depends. A simple DIY will can cost $150 online but if you need help from a lawyer (and you might depending on the size of your estate), you could pay up to $600 or more.
If you own substantial property holdings or have a complex family structure, a trust may be a better option for you vs. a will. A living trust is a legal entity that allows you to transfer ownership and management of your property and assets into a trust, which is then subsequently managed by a trustee on behalf of your beneficiaries. Setting up a trust can cost over $1,000.