The month of August is nationally recognized as "Make-A-Will" Month. This month of recognition provides an opportune reminder of an often-overlooked aspect of personal finance and estate planning. Simply put, a will is a legal document that outlines how you wish certain assets to be distributed after your death. At death, certain assets are subject to the probate process and others are not. Without a will, state laws will determine how your probate assets are divided, which may not reflect your wishes. The benefits of creating a will are plentiful and greatly impact your ability to control your legacy.
Benefits of Making a Will
Control of Asset Distribution
A will allows you to name specific individuals or organizations as beneficiaries of your probate estate. This ensures that your assets go to the people or causes you care about most. Proper planning protects the assets both during lifetime and at death for the next generation. Furthermore, you can provide detailed instructions on how your assets should be distributed, including items of sentimental or significant value.
Protection of Minor Children
If you have minor children, a will enables you to appoint guardians to care for your children in the event of unforeseen circumstances. By nominating a guardian for your children's care, you can make certain that your intentions are met should the unthinkable. Otherwise, a judge or magistrate will determine who is the best fit to raise your children based on the evidence presented to them in court. Having a will can be especially important for single parents to ensure the right person would care for their children in case of the unexpected.
Efficiency of Estate Administration
In your will, you can appoint an executor to manage your estate. The executor will handle tasks such as paying debts, filing tax returns, and distributing assets. This can streamline the probate process and ensure your estate is settled efficiently.
Peace of Mind & Flexibility
By clearly outlining your wishes, a will can help prevent misunderstandings and disputes among family members and can provide peace of mind for you and your loved ones. It ensures that your wishes will be honored and that your family will be taken care of according to your intentions. This can reduce stress and conflict during an already difficult time. As life changes, this document can be very easily updated. To stay on target with your goals and circumstances, regularly review your estate plan documents to ensure they are best serving you.
A Better Option
Although making a will is a crucial step in your estate plan, there are limitations. As mentioned above, in addition to naming a guardian for minor children, a will only directs how probate assets are passed at your death. A goal (and standard) of ours is to ensure that our clients avoid the probate process to the extent possible. A well-structured estate plan will avoid probate, protect assets for your family, and minimize negative tax implications. While making a will is important, National Make-A-Will Month serves as a reminder of the importance of proper estate planning that extends well beyond the will.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.