Nobody wants to think about planning for his or her own death, but it’s something every adult should consider—sooner, rather than later. Some of the things you need to consider include life insurance and creating a will.
What is a will?
A will is an estate plan that goes into effect after you die. In your will, you can direct a person (or persons) as your legal representative(s) to carry out your wishes and designate who will receive your property and assets upon your death. A will does not cover any property that is held in a trust or joint tenancy, but only property that is held in your name. A will must pass through probate. In other words, a court will oversee the administration of your will and ensure that it is carried out the way you wanted. As such, a will becomes public record.
Here are 5 things everyone should know about writing a will:
- Everyone needs a will. If you die without a will, it can be very costly to your family and heirs, and you will have no say over the division of your assets. State heirship laws take over. Writing a will alleviates the burden placed on your family after you die. A will also allows you to specify funeral arrangements and to predetermine who will take care of your children—this is the primary reason even young adults who have children should have a will.
- Work with an attorney. Every state has different rules and regulations regarding wills. It is in your best interest to work with an attorney who fully understands the legalities surrounding writing a will in your state and is experienced in estate planning and death taxes. Hiring an attorney to help you write your will ensures that you have a properly created legal document.
- Carefully select the executors of your will. These are the people you will assign to carry out your final affairs after your death. Choose people you trust and you know will be up to the task. You may also want to choose a backup executor in the event your first choice is unable to serve as executor upon your death.
- Discuss your plans with your family. After you plan your estate, take time to discuss those plans with your heirs to help prevent confusion or disputes down the road. Family conflicts are unfortunately common when dealing with a loved one’s estate, but by planning ahead, you can help reduce or eliminate any potential arguments among your family and children after you die.
- Consider a trust as well. Unlike a will, a trust goes into effect as soon as you create it. It is a legal arrangement in which you designate an individual or an institution (such as a bank or law firm) as your “trustee” to hold the title to your property. You can also designate a beneficiary or beneficiaries to receive what is left of your estate after you die. A trust will only cover property that has been transferred to the trustee. Any property you wish to be included in your trust must be put in the name of the trust. A trust does not pass through probate, which can save both time and money. Because a trust is not probated, it can remain private.
An experienced will and trust attorney can help you determine if you need to set up a will or a trust to handle your estate and guide you through the process. An attorney will explain the legal terms and help ensure that your will or trust is set properly so there are no questions in the event of your death. Your attorney can also help review your financial assets and double check who can receive what from your retirement accounts.
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