18 September, 2023
Top 7 Reasons for Having a Will
A will is a crucial document that every adult should have prepared. With a will, you can plan your end-of-life (see our end-of-life planning checklist) and distribute your assets, ensuring the smooth administration of your estate.
Sure, you can designate beneficiaries on some assets and investment accounts, but that isn’t always possible on some of your most valuable possessions, like real estate.
Despite being such a vital document, it’s surprising that only about 46% of American adults have wills, according to a Gallup survey.
Still not convinced about having a will? Here are the top seven reasons to create one.
1. Assets Without Designated Beneficiaries
While you can assign beneficiaries to your accounts, you cannot do that to valuables like real estate, vehicles, artwork, or personal belongings.
Without a will, these may not end up with the people you wish to endow. Your estate will go through a legal process called intestate succession, in which the state decides how to distribute your estate.
Having a will ensures the distribution of your property according to your wishes and minimizes disputes over the apportioning of your estate.
2. Specific Instructions and Wishes
A will allows you to provide specific, unambiguous instructions for distributing your assets. This is especially crucial if you have special items with sentimental value or want to support people or causes that are dear to your heart.
Your will states your wishes regarding bequests to specific individuals, charitable contributions, or any other unique requests that beneficiary designations might not cover.
3. Guardianship for Minor Children
If you have minor children, nothing is more critical than designating the right guardian after your death. A will lets you choose who will look after your children and make important decisions as you likely would.
A court will appoint a guardian for the minors if you do not name one in your will, and your kids might end up with the last people you would have chosen.
4. Estate Planning and Tax Considerations
A will is an essential part of comprehensive estate planning and tax considerations.
As per 2023 stipulations, the federal government requires you to file an estate tax return on individual estates valued at $12.92 million or more. A will can help minimize tax liabilities and provide strategies to preserve your assets.
Moreover, a will can establish trusts to manage and distribute assets over time, providing benefits such as asset preservation, estate tax reduction, and controlled distributions for beneficiaries.
5. Name an Executor of Your Estate
An executor is responsible for carrying out the instructions in your will, which may include distributing assets, paying off debts, and managing legal processes. A will ensures you designate a trustworthy individual instead of leaving that to chance.
6. Help Avoid Probate
Probate refers to the process of authenticating a deceased person’s will and distributing their assets to named inheritors. It can take nine months or more and be costly, potentially tying up your assets for a lengthy period.
A legal will can help avoid probate by directly transferring the inheritance to your beneficiaries.
7. Ensure the Carrying Out of Your Wishes
Having a will lends voice to your wishes when you’re gone. If you don’t have one, the court will use state law to distribute your assets – which is inadequate if you have minor children or other exceptional circumstances.
Moreover, a will comes in handy even if you’re still alive; the court will use it if you become incapacitated and unable to make your own decisions.
Having a will ensures your estate administrator carries out your wishes, even if you have beneficiary designations. It is the most effective way to protect your loved ones by distributing assets to the people and causes you care about.
You can write your own will or consult financial advisors for estate planning advice. Speak with an advisor today to guide you through your will and estate planning process.
Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.