Why Your Will Should Be a Top New Years Resolution
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Estate planners tell us that nearly 70% of Americans die without a will.
It’s important to realize that a will is a gift you leave your family or loved ones. It is a gift because it makes the management of your estate very clear and light-years easier. If you don’t have a will, the state will decide what happens to your stuff, your kids, and your financial legacy. You don’t want this to happen. Even if you’re single, get a will right now.
Make this the year you take on this resolution, this task, this very fundamental need that every one should do and consider it the first step in creating a Legacy Drawer. It is a file drawer that has everything that is needed if something happened to you. It has letters of instruction: a full will, a full estate plan, all investments, copies of insurance information, etc.
I want to emphasize that a will is important because if you do not designate who will inherit your property, a state statute will. The statutory distribution scheme (known as “intestate distribution”) will often provide for results differing from your wishes. If you have property in several states, the rules in each state may be different concerning who will be entitled to your properties.
Typically, intestate law divides the decedent’s estate between the surviving spouse and living children; however, many people are surprised by the actual division made by state law. Even if the decedent does not have children, the spouse generally will not inherit the entire estate. Moreover, because your children are minors, the court will require a fiduciary (e.g., a guardian or trustee) to be appointed to receive and manage that property the children inherit. This can be a cumbersome and expensive process, requiring court supervision throughout the time the children are minors.
Perhaps most importantly, a will gives you the opportunity to designate a guardian for your children if your spouse does not survive you. You have better understanding than a court as to whom of your relatives or friends will best be able to care for your children, both emotionally and financially. Your will can put this designation in place, identifying the best person for each type of function.
A will can also simplify the probate process for your survivors. For example, you can designate a personal representative (also known as an executor) to handle the transfer of properties in your estate. You can direct how taxes and debts should be paid. You can waive state limitations on funeral expenses payable from your estate and enable your estate to take maximum advantage of estate tax savings.