Is your family protected in the case of your death?
You work hard to take care of your friends and family, that’s why you have taken an interest in achieving more. But what if the worst happens, and you aren’t around to support your family and community further? This is where a will becomes essential, to ensure what you worked hard for in life goes to where you want it to after your passing.
What is a Will?
A will is a legal document that tells the courts what you want to happen to your property, and the care of any children still considered minorities, in the event of your death.
Why are Wills important?
Without a will, your property and any young children will be assigned to the courts to deal with. This creates a lengthy, time consuming, and often expensive process. Furthermore, disagreements over your property causes more stress on loved ones, and can result in fractured relationships as well as your property being distributed in a way you wouldn’t want.
A will helps alleviate these issues, by telling the courts exactly what you want to have happen with your property. Through this document, you can allocate bank balances, property ownership, and distribution of family heirlooms to different people. You are also able to donate to charities or institutions. By creating a will, you are also able to create tax savings through gifting allowances, etc. This ensures more of the assets you gathered through your efforts are given to the right people, and less is lost in estate taxes to the government.
Perhaps the most important aspect for parents of young children though, is the ability to direct who will be caring for your children in your absence.
And if I don’t have a will?
If you don’t have a will, a probate court will assign an administrator to consolidate the value of the estate, and disburse the property and assets based on court decisions. This almost always splits the estate among the surviving spouse and children, if applicable. If neither of these options is available, the government takes ownership of the estate.
Aside from stressing the relationships of surviving loved ones, a court appointed administrator must follow certain formulas and rules for distributing the assets of the estate. This could result in the family home being given to someone you wouldn’t have intended, or even forcing the sale of assets to divide the proceeds among the beneficiaries. When this happens, the tax laws come into play, and you can lose a substantial amount of value of your estate in taxes, leaving far less to your beneficiaries than you would like.
How do you prepare a will?
There are a variety of ways to prepare a will, including some very low cost solutions. At the expensive end, you can hire a lawyer to assist in the preparation. They will help you compile a list of all your assets and debts (liabilities). From there, you can indicate who should receive what asset, or part of an asset. That same process is followed by the cheaper options, websites or even DIY kits that you can find on Amazon!
Once prepared, the will should be witnessed by 2 adults who aren’t included as beneficiaries. The final element of creating a will is to name an executor, someone who will work under court supervision to ensure that your will is followed. Other than being an adult, there are few restrictions on naming an executor, and you can easily name a spouse or child to deal with this. The executor’s role is important in ensuring the smooth settlement of your estate, including discharging any remaining debts you have, and informing government and financial institutions.
Now that you have a will, store it in a safe place! A home safe is usually best for this.
You work hard for your success. Make sure that those efforts aren’t wasted for your loved ones, family, friends, and community that you leave behind. Taking the time to create a will is an important step in ensuring that your assets are distributed fairly, without losing excessive amounts to taxes. And if you have young children, this step is even more important as it will ensure they are cared for by the people you nominate.
A will is an important element of your financial plans, that will ensure your achievements keep paying off to your loved ones long after you’ve moved onto your afterlife adventures.