Leaving a meaningful legacy

How a simple will can help you take care of your family

Throughout your working years, you’ll likely accumulate all kinds of property and assets: a home, a car, a boat, jewelry, collectibles, some personal savings or investments, life insurance, retirement savings, maybe a small business, rental property, a vacation cottage, or land you plan to build on in the future.  

When you pass away, your life insurance benefit and retirement money will go directly to the people you have named as beneficiaries. But what about all of those other assets?

A will gives you a way to make your wishes known

Creating a simple “last will and testament” document can help ensure that your assets go to the people you specify. If you don’t have a valid will that’s signed and witnessed, your local probate court will distribute your property according to the state’s rules on “intestacy” (which means dying without a will), which may not be what you intended. 

But your will is not only about how you want your assets and property to be given away. It can also:

  • identify the person you want to handle your affairs (your executor) when you pass away, 

  • name the person who is responsible for your children (their guardian) if you and your spouse should die before they reach adulthood,

  • establish trusts to hold money for the benefit of any children or disabled adults still dependent on you for support,

  • specify the charities you want certain assets to go to, and

  • list specific personal property or heirloom items that you want your children and others to receive after your death.

Once you’re ready to write your will, you can work with an attorney or do it yourself using online tools. Your employer may provide services for will preparation as well. However you choose to prepare your will, here are three key questions you’ll need to answer before you get started. 

What assets and property do you actually own?

It’s important to take a quick inventory of your assets to find out which ones you own entirely and which ones you own jointly with “rights of survivorship,” or as a “tenant in common.” When you’re giving away assets, you have to make sure you actually own them.

How do you want those assets and property to be distributed?

Dealing with children or other dependents fairly does not always mean dealing with them equally. Consider dividing your estate using percentages rather than fixed dollar amounts, because an estate’s value changes over the years. If your state has community-property laws, your surviving spouse is entitled to keep half of your wealth after your death, no matter what percentage you specify in your will.

Think about using life insurance with a specified beneficiary or an investment account with a “transfer on death” (TOD) designation if you want to transfer assets quickly and privately. Neither of these tools are included in the probate process.

What specific circumstances need to be addressed?

In addition to making provisions for your minor children, you may need to deal with complicated inheritance issues due to a second marriage. Make sure you tell your lawyer your entire story when it comes to your family and your assets.

Once your will is drafted, signed, and witnessed, you’ll need to update it periodically to include any changes in your life. Marriage, re-marriage, separation, divorce, birth, adoption, and the death of a spouse or of an executor are all reasons to review and make changes to your will.

Sources

USA.Gov "Writing a Will," accessed January 14, 2014, http://www.usa.gov/topics/money/personal-finance/wills.shtml.

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