Financial Literacy Friday: Having a Will
This edition of Financial Literacy Friday is going to deal with reasons for creating and maintaining a will. While this falls under estate planning and the legal profession, it’s such an important piece of literacy that I felt it needed to be included. A will is a living document that can legally protect your spouse, children, and assets but also detail how you want your estate handled after you have passed on. So, without further ado, let’s look at the top reasons to create a will.
You get to decide how your estate is distributed. Because a will is a legally-binding document that allows you to decide how you would like your estate to be handled, you’ll be able to control how everything is divided. This is especially important in minimizing family fights that may arise out of the confusion that can occur when there’s no will in place.
You can determine who will take care of your children. If you have children who are minors, you’ll be able to determine who you want to raise them when you pass. Lacking this directive, courts will likely appoint a family member or state appointed guardian, so it’s as much about avoiding people you don’t want to raise your children as it is having the right person for the job.
Avoiding a lengthy probate process. While all estates must go through a probate process, having a will greatly reduces the time needed to clear that process. If you pass without a will, it’s up to the court to determine how your estate should be divided which can cause long delays.
Minimize estate taxes. If you give away assets to family members or charities, that will reduce the value of the estate when it comes time to pay estate taxes.
You can choose an executor of your estate. The executor is responsible for paying off any final debts, cancelling credit cards and other accounts and making sure all loose ends are tied up. You want to appoint someone who is honest and trustworthy, so having that ability is very important.
Avoid legal challenges. If there are those who you do not want to inherit, having a will that clearly lays out your estate is the best way to avoid legal issues that may arise. Without a will, someone who has not been in your life may end up with most of the assets depending on the situation, so having a will is a safeguard against that happening.
It’s a living document. You’re able to change your will at any time while you’re alive to account for deaths, births, divorces, whatever else life may throw at you. This is why it’s especially important just to get one set up, because it doesn’t need to be exactly perfect at the beginning. It will change as you go through life and your situation changes, but the importance of having something in place cannot be overstated.
Here are 7 reasons why having a will is important, and there are tons more. For most of you it probably seems pretty early to be thinking about a will, but as I mentioned, it can and likely will change. Getting even something basic set up is very important. Please let me know if you have any questions or want a referral to an estate attorney.