Why You Need A Will
“I would just love to spend a few hours this evening having hard conversations about what happens if I die.” – No one ever
This is not a fun or enjoyable topic. It involves planning for an event that you hope doesn’t happen prematurely and is a long way off, so it gets booted to the bottom of the to-do list. From experience, improper planning can have dire consequences even for families that seem to have simple family situations.
Improper planning can lead to
(a) stress and guilt - Do you think mom would want to have this surgery? Did she ever mention anything to you?
(b) Confusion and inaction – They seem to be forgetting a lot. Is it time for us to take over their finances?
(c) Relationship tension – I know we are supposed to split everything evenly, but Dad told me he wanted me to have his coin collection.
Over the next few weeks, I will be tackling the key estate planning documents that everyone should consider having in place.
There are 5 key documents
Last Will & Testament
Revocable Living Trust (optional)
Source: LegalZoom
Appoint someone to settle your affairs: This person is called your executor. If you are married, a natural choice is your spouse. However, it is necessary to think of successor executors since given the natural age similarity, it is very possible that they will not be alive to handle the affairs. Oftentimes the best choice for successor is the most responsible child, niece or nephew.
Choose who will receive your property: All property will be divided among your beneficiaries, administered by your executor and likely the county probate courts. In part 4, I will discuss the role of living trusts, which allow for more control over how the property is divided and used and in part 5, I will discuss the role of beneficiary forms, which many retirement accounts have.
Decide who you want to raise your kids: In my opinion, if you still have minor children, the most important function of your will is to decide who will care for your children if you were to pass away. This is a really difficult decision that should be made after serious consideration and conversation. You need this person to be trustworthy, responsible, and also willing.
Next week we will tackle living trusts, a document that is not necessary but can lead to significant cost savings and headaches for the individuals handling your estate.
Thank you for reading,
Alex
This blog post is not advice. Please read disclaimers.