“When should I do a will?” This is a common question that has probably crossed your mind recently. Well, you’re not alone. According to CNBC, two-thirds of American adults don’t have a will! As shocking as it is, one of the major drawbacks of not writing a will is that the law will decide your estate’s distribution regardless of your wishes.
If you don’t want to cause your grieving loved ones more pain, contact an estate lawyer to help you put your wishes in black and white. It’s a straightforward process. This article will expound on the ten things you must consider. Read to the end for insightful information.
1. Check On Your Assets
Let’s be frank. There are happier things to think about than worrying about “When should I do a will,” right? However, thinking about what will happen to your loved ones after you pass on is essential. The first item you must consider before creating your will is the kind of assets you’ll leave behind. You must include all bank accounts in your name, such as savings, checking, money market, and certificate of deposit accounts.
Remember, bankruptcy affects heirs’ ability to inherit. The estate administrator pays off debts first. For this reason, you should involve a bankruptcy attorney to iron out debt issues, especially if you have filed for bankruptcy.
Did you know the law considers your pet your property? So, while taking your furry friend to a vet for a dog vaccine is good, you must include them in your will. Assign them to a family member who fancies pets to leave them in good hands if you kick the bucket. It’s an eventuality you should be ready for.
You must also include real estate property, including rental property, primary home, land, vacation home, and commercial real estate in your will. Do you have investments in digital assets? If so, list them in your will too.
Your beneficiaries are legally entitled to inherit your companies. Be it a used car dealership or moving services company, ensure to include them in your will. The goal is to leave businesses in the hands of capable beneficiaries with business management expertise.
2. Who Will Be Your Beneficiaries?
Choosing your beneficiary is very critical. A beneficiary’s designation is final and can’t be corrected after death. For this reason, as your life changes, you must update your beneficiary designation as per your wish.
Generally, there are two kinds of beneficiaries, namely, primary and contingent. A primary beneficiary will typically receive death benefits from your life insurance policy. Mostly, it may be your spouse, children, or close family members. Most policies give you the luxury of choosing a backup beneficiary, also known as a secondary or a contingent beneficiary, in case your primary beneficiary passes on at the same time as you, m.
When naming your beneficiary, you must be specific. You must provide the person’s full legal name and how they relate to you (child, spouse, or brother.) Also include their mailing address, phone, and social security number.
Did you know your beneficiary can also be a trust, charity, or estate? According to CNBC, although 68% of millennials expect to receive an inheritance, only 40% of parents will leave one. Many moguls choose to donate their wealth to charity organizations. However, you should determine what state laws require when naming a beneficiary, as some require you to list your spouse as your primary beneficiary.
3. Choose the Executor of Your Will
Your executor carries out instructions on your will. It’s imperative that you choose a trustworthy person. So, once sort out the “When should I do a will” question, how about choosing the right executor?
Your executor has the power to make hard decisions, including when to liquidate your assets and how to distribute the most money to heirs. For example, they may opt to get cash for camper instead of leaving your camper to rot in the garage. A suitable executor will make the sale at the peak of the camping season when it will fetch more money than the off-season. Additionally, they pay the right amount of capital gains, inheritance, or income tax.
Mostly, people choose their civil partners or children as executors. Whichever the case, an executor must be over 18 years old when applying for probate and a legal document giving you the right to sort out the affairs of a deceased person. It’s also very common to name your beneficiaries as your executors.
Your executor will carry out your affairs diligently. For instance, if death occurs before judgment after an accident in that you aren’t at fault, your executor will work hand in hand with your car accident attorney to get justice even in death. Also, a good executor will see that the oral surgeon bill and other medical expenses are paid in full.
Above everything, choose someone you trust as your executor. It will be upon them to follow your instructions and execute your wishes to the letter. They’ll be responsible for finding fair solutions in case of disagreements. It also helps if they’re good at paperwork and managing legal issues.
4. Get the Right Guardians
Did you know that if you don’t name your guardian before passing on, the court will decide who will care for your kids? Legally speaking, the surviving parent has the right to custody. Otherwise, you must choose a guardian with the kid’s best interests.
Before penning it down, talk to the potential guardian. You must ensure they are ready and willing to take on the role. Naming anyone without consent doesn’t mean they’ll gladly take on the responsibility. Saying no is within their rights
When picking a guardian, you must consider all angles. Do you share the same values with your guardian? Will they raise your children as you would? If you are wondering “When should I do a will?” A good answer is when you find the right guardian. Guardianship is a weighty subject that requires proper scrutiny.
After agreeing on guardianship, you must include all their details in the will – for example, their full legal names, email addresses, telephone numbers, and street addresses. Additionally, you must keep the information current to give your executor an easy time finding them.
Keep your will up to date. If a named guardian passes on before, it will be impossible for them to take on guardianship. Also, circumstances change, and you may lose touch with them. For this reason, it’s essential to name a contingent guardian in case something goes south.
According to Forbes, high-value assets may attract up to 40% estate tax. Hence, ensure you consider possible taxes when writing your will. How much will your beneficiary receive after taxes? How much tax are they expected to pay after execution? Even so, many people typically avoid inheritance taxes through deductions, exclusions, and credits.
Inheritance is taxable, especially when passed down to a beneficiary who isn’t an immediate family member. Mostly, your spouse will be exempted from taxation, meaning the benefits that go to them aren’t subject to inheritance tax. Sometimes, children also are exempted from such taxes. Typically, your residence will significantly affect your inheritance specifics and tax bill. States like New York and Texas don’t charge inheritance taxes. So, when you’re thinking “When should I do a will?” Don’t forget to consider taxes.
However, there are a few ways to minimize the tax bite on inherited assets significantly. While a qualified tax expert can help expound on the subject, a quick way to do this is to give assets before passing away. Has your doctor informed you about a life-limiting illness? Consider handing down your assets as gifts, exempted from taxation in most states.
6. Family Conflict
According to CNBC, 44% of attorneys, accountants, and trust officers agree that family conflict is the biggest threat to inheritance – especially estate planning. How about assessing whether there’s a simmering family conflict after you pass on? It will give you a definite answer to “When should I do a will?”
The number of blended families is growing speedily in the states, creating a need to clarify your estate. According to Forbes, the U.S. recorded 689,308 divorces in 2021! The statistics indicate family conflicts are rife and might involve multiple children, grandchildren, and exes from previous marriages.
Having a will ensures that all your assets are divided among your family according to your wish. Also, it’s best to communicate your wishes earlier to your family members to avoid any disagreements in the future. Let them know your goals and intentions for your assets and how to care for them. Be specific. For instance, choose the gutter companies you prefer to keep your home clean or the landscaping company you’d wish them to hire to maintain your yard.
7. Funeral Arrangements
Let’s face it. The ‘When should I do a will?’ question will probably be followed by, ‘Can I include my funeral arrangements in my will?’ Well, the answer is a resounding yes. Your will and funeral typically go hand in hand. So, include a clause in your will that speaks of your funeral wishes. Also, a detailed plan discussing cremation or your burial preference lessens the load. It helps avoid unnecessary conflicts among your loved ones.
When a loved one passes, the situation is extremely emotional. Dealing with grief alongside funeral arrangements is overwhelming. Therefore, including the funeral arrangements as part and parcel of your legal document will be prudent.
As per the law, your funeral arrangements become the responsibility of executors, which might ease the burden on your loved ones. Even so, in the presence of executors or not, your family members or your closest friends will naturally prepare your funeral arrangements. However, planning becomes straightforward with a detailed plan on how everything must be done.
8. Consider Unforeseen Problems
It’s known that even the best plans are susceptible to unforeseen challenges. Therefore, when thinking about “When should I do a will,” consider what challenges you may encounter. Also, ponder on possible solutions. Assume your beneficiary passes on before getting their inheritance. To prepare for such unforeseen problems, you must state who their share will pass on to.
Your attorney’s fees can also be a creeping problem. For this reason, the best way to manage legal fees is to handle them while still alive. Failure to do this may likely result in increased fees, especially due to family legal battles over your possessions.
9. Changes in Circumstances
Are there any significant changes in circumstances that may alter the terms and conditions of a will? Before you decide “When should I do a will?” ponder on unforeseeable changes. You must build flexibility. Use a trust to provide protection and flexibility. For instance, marriage or remarrying automatically revokes your will unless it states contrary intentions. However, a divorce may not cancel your will but may alter the terms and conditions.
10. Storing the Will
Your last consideration when preparing your will is the storage. When you go through a solicitor or hire a will writing service, they may offer you storage services for an additional fee or sometimes free.
However, there are independent will storage companies and Probate services that can safely store your will. Also, you may safely keep it in the bank or entrust it with the executor of your choice. Regardless of your storage choice, always ensure your executor knows exactly where your will is kept.
More importantly, you should store your will with trustworthy entities. Avoid keeping your will in cabinets, a safe deposit box, or with an executor. If you must, keep it in a home safe. However, the best decision is to file it with a probate court or your attorney.
Is the thought of “When should I do a Will?” Constantly flashing in your head? Developing a plan for what happens after you pass on is vital. To plan efficiently, you must consider essentials such as listing your assets, choosing the right executor, taxes, and solving potential family conflicts.