We mere mortals all know we will die someday, yet discussing end-of-life matters is extremely difficult for many people. Thus, creating a will is one of those matters that many Americans put of discussing, let alone actually getting done. A will, however, is crucial in helping your wishes to be clearly understood once you are gone, and can even make it easier for your loved ones to handle day-to-day affairs once you are gone. Because these issues can be complex, it is important to discuss your wishes and the will you create with your family members, a lawyer, and a financial planner.
A will is a document that specifies how your estate, including all property and assets, will be distributed after your death. For your will to take effect, a court must recognize it as legally enforceable. If you die without a will, a judge will apply the laws of your state regarding the distribution of your assets.
Stuck in Court
Dying without a will forces the probate court to make decisions about how to distribute your assets, which may take a good amount of time. Thus, your family may be unable to utilize the fruits of your labor for some time while the courts make their decision on your assets. This is a top reason financial advisors recommend that you create a will.
Many people will have insurance policies, retirement funds, and even checking accounts with a named beneficiary. The beneficiary – let’s say your spouse – won’t have to wait for probate to make decisions regarding the distribution of those assets. If you have other property or assets, a will allows you to name a beneficiary for them, as well.
Will or no will, a probate court judge still has to validate the document, so no one completely avoids probate. Your family just won’t be bound by the process for a significant period of time if you take the time to create the appropriate legal documentation.
Simple Solution for Complex Situations
Complexity is how we live these days. Many of us have complex portfolios or complicated family situations. A will allows you to reduce the complexity of the estate distribution process for your family’s benefit. An experienced wills and trust attorney can, with the help of a good financial advisor, create a “designer will” that will best fit your circumstances.
If you have a large enough estate that your family will face paying the estate tax on the assets they receive, you can help them avoid it through a will. Your lawyer and financial planner could help fashion the will so that you significantly reduce your heirs' tax liability.
Difficult Discussions Made Easy
Another type of will is perhaps the most difficult to talk about – the living will. This document will inform family members how to care for you should you become unable to speak your wishes due to some form of illness.
While these issues may be difficult to broach with family members, everyone will benefit in the long run from your planning. We recommend discussing your wishes and creating a will with a good financial advisor and estate planning attorney. It may be the most important discussion you will ever have regarding your family’s future.
This content is developed from sources believed to be providing accurate information, and provided by Booth Financial Planning. The information in this material is not intended as investment, tax, or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.