Many people work their entire lives without ever establishing a will or estate plan. Without a will, it is more difficult for the surviving family members to probate the decedent’s estate, and the beneficiaries of the estate may not be the ones the decedent would have chosen.
Although discussing where your assets will go upon your death may not be a preferred topic of conversation at a cocktail party, it is an important decision that everyone should make at some point.
It is never too late to establish a will or estate plan. Naturally, many people do not start thinking about the disposition of their property until later in life. Some even wait until they are on their deathbed to create a will. As long as you have the necessary capacity to sign a will, and you do so under your state’s laws, its never too late to create a will.
There is no standard time in life when you should consider planning and creating a will, but as with many things in life, the earlier is usually the better. Young professionals and recent retirees alike have reasons to consider planning a will. In situations where a person dies intestate (without having signed a will), state law usually governs where that person’s property goes. This can lead to unforeseen and unwanted results as the decedent’s property can pass to the beneficiaries he or she did not choose. To ensure that your property is passed to the beneficiaries of your choosing, it is vital to start planning and creating a will early.
It is important to have a clear understanding of the assets you possess that would pass on to beneficiaries upon your death. Without complete knowledge of what you have, it is difficult to determine where it should go after you die. Many people have retirement accounts, and it is important to know the beneficiaries of those accounts. Others possess investment account that may be jointly held with a spouse. State law generally dictates how a family home will pass upon the death of the owner, and the owner should know how title to the home will be transferred if the owner dies. Before talking with an estate planning lawyer, be sure to know what you have and to whom you would like it transferred upon your death.
Divorce, marriage, the birth of a child or grandchild, the death of a child, a child reaching the age of majority: these are all events that should be considered when planning or editing a will. When you die intestate, these events greatly alter the effects of state law on who your beneficiaries would be. A properly executed will can help you plan your estate and choose your beneficiaries in the wake of these events.
Estate planning can get incredibly complex, especially with high net-worth clients. When planning and creating your first will, simplicity is key. If you are establishing an estate plan early in life, your estate plan should be more focused on making sure your affairs are in order and your assets are passing to your chosen beneficiaries if an unexpected death occurs.
Planning and creating a will can be a daunting task for some. The thought of dying, coupled with the decisions associated with passing on assets, can be intimidating, but it does not have to be. Think objectively about the process and the purpose of planning and creating a will; you have worked hard and you deserve to pass that hard work on to your beneficiaries. Stay focused and determined throughout the process, and your estate plan will work when the time comes to administer it.
Form wills are becoming more and more popular, as you can find them in office supply stores and they are readily available online. Form wills can be useful tools for examining the general language in a will, but it is highly recommended that a form will not be relied upon for your estate plan. Because most state laws govern the execution of a will, it is very difficult to sign a form will and have it probated properly. Creating a will is an important decision in your life; it is better to have the requirements and language explained to you by a professional, and be assured that your document will pass muster.
A holographic will is one that is completely handwritten and signed by the testator (the person to whom the will belongs), and about half of the states have statutes that invalidate or strongly restrict them. These states have decided that creating a will is an important decision and should be consummated with a typed document that is properly executed, witnessed, and/or notarized. Naturally, the testator should approach creating a will with the same regard; the convenience of a holographic will is not worth the risks of invalidation.
Just as most people won’t rely on their own knowledge if they want to draft plans and build a house, they should not plan and create a will alone. The costs associated with establishing an estate plan can be high, but they do not have to be. If you start early and your wishes for your will are simple to draft and administer, the costs should remain low. To avoid all the “don’ts” above, it is recommended that you seek professional advice.
There are instances that warrant keeping the details of your estate plan confidential. But when you feel comfortable sharing your wishes with your family, it is important to do so. Maybe one child is well-off while another is struggling. It may be important to discuss this with them and explain why one child may receive more than the other. Maybe you are in a second marriage, and you would like half of your estate to go to your children and not your second spouse. Discussing this with the family may be important to you to ensure that you and your beneficiaries are on the same page. If you feel comfortable sharing this information, then you should.
Planning and creating a will is an important step in your life, and it is not one that should be taken lightly. However, it does not have to be daunting or depressing. It can be an assurance that your family will be taken care of upon your death, or it can be a simple fail-safe plan in the case of an unexpected death. Creating a will can be complex, but following the guidelines above will help you get started in your estate planning process and keep you on a path to successfully establishing an estate plan that works for both you and your beneficiaries.