Why You Need to Have a Last Will and Testament

When it comes to family and financial planning, there is no doubt that life insurance is important to think about.

Having a will ranks right up there with life insurance though – and is one of the most important things you could do right now to take care of your family. If you don’t have a will, you might want to think about investing the time to take care of putting one in place, especially if you have kids. 

According to USA Today, 64% of Americans do not have a last will & testament.

64% of Americans don’t have a will. Of those without a plan, about 27% said there isn’t an urgent need for them to make one — and 15% said they don’t need one at all.

That is shocking – my guess is that for many, it’s just one of those things that they continue to put off (kind of like saving, or retirement, etc.)

The laws on wills and estate planning vary considerably by state – but rest assured, if you don’t have one, the government will make one for you.

(I can’t think of anything appealing about that… honestly!)

What that means for you is that the government will split your belongings between your spouse, children and next of kin. Then, the rules of your state apply in terms of distribution of your assets – which can be a nightmare.

Your will can protect your spouse, children and assets – then, it will also pinpoint exactly how you would like to have things handled after you pass.

What is a Will?

A will is a legally binding document that will determine how you want your estate to he handled upon your death. Not only will it help with the who, what and when of your estate, it will {hopefully} alleviate family arguments about your estate that might arise when you pass. 

There are MANY reasons to have one – if you don’t currently, or don’t think you need one, you might want to read through these reasons to re-think your decision. It might just be one of the best decisions you can make this year.

#1 – Having a Will Helps Decide who will Care for your Children

This is one of the biggest reasons to have a will in place.

Your children are important people- and in the unfortunate circumstance that anything happens to you, you will want to make sure you have care lined up for them.

And while you might have a verbal agreement with family, that won’t hold weight when it comes to your passing – having a will allows you to determine who you want to raise your children. 

Without a will, the court will appoint a guardian – who may or may not be a family member. It could very well be someone you might not want to raise your kids.

(Note: With EACH new birth OR adoption, you need to update your will because your baby will need a legal guardian should anything happen to you or your spouse.)

If you are adding a first child and a new guardian, a new will should be written; otherwise, you can prepare and sign a codicil to the existing will. A codicil is a separate document that adds to, or replaces, one or more provisions in an existing will. 

#2 – Helps Decide how your Estate is Distributed

Having a legal document will ensure that your estate wishes are carried out as per your request – it will help alleviate family arguments that might come up. It will also determine the particulars – who will distribute, what they will distribute or what goes to who, and WHEN they will distribute.

#3 – Helps Reduce your Estate Taxes

One of the biggest ways a will can help you is by allowing you to reduce your taxes – when you give away to family members (or, perhaps even a charity) you are reducing your estate value. Thus, when it is time to pay estate taxes, that reduced estate value will lend way to lower taxes. 

#4 – A Will Helps Ensure you can Make Gifts and Donations

By having a will, you can appoint family members or friends to gifts and donations – if you gift or donate up to $13,00, you can once again escape estate tax.

#5 – You can Ensure your Estate is Taken Care Of

Through a legally binding document (will), you can appoint executors to handle the affairs of your estate. These people will take care of things like calling your bank, dealing with your loans, credit cards, businesses, or even paying off bills you owe money on.  You’ll want to make sure you select someone in your family or, even a friend, that you know is responsible and trustworthy who has a knack for organization. The last person you would want is that family member that will forget to pay your debts or … can’t keep their own life organized. 

#6 – You Can Appoint Individuals to Inherit or Disinherit your Estate

Why is this so important?

If you had a nasty divorce, you probably wouldn’t want your ex getting a hold of your estate distribution -right?  In that case, you can disinherit people from your will. Likewise, you can appoint people TO your inheritance.  Both are just as important as the other.

Where do you get your Will Completed?

You can visit a wills and trusts lawyer for changes to an existing will, or an estate planning lawyer for legal advice.

OR simply prepare and sign a new will that revokes an earlier one.  Sometimes Groupon has offers on wills for couples and individuals.  

Where do you Store your Last Will?

After you have created a will, the next decision you have to make is to store your will so that the executor can find the document when needed.   Your executor AND beneficiaries should know where the will is, and be able to access it easily – you have a few choices:

Safe Deposit Box

If you are storing it in a Safe Deposit Box, you will want to check your state laws – some of the laws dictate when the deposit box can be opened on your death and what they will need to open it.  Make sure your executors (and beneficiaries) know where the safe deposit box is, and ensure you have given them the legal authorization to possess that will after you pass.

County Clerk

Some counties will store your original will for a small fee.. but not all. So check with your county clerk to determine if they will. You will also want to make sure you communicate where it is to your executor / beneficiaries, too. Although this can be a great place to store it, it might also be difficult if your family is not local or, if you later move away as the will remains in the possession of that county.

Attorney

If you have an attorney, he/she can keep a copy of the will – but only if you are keeping that attorney for the rest of your life.They may charge very little (if anything) to retrieve a copy. But you will need to let your executor and beneficiaries know what attorney has it. You may also want to give that attorney a copy (that is signed) just in case you lose your will.

In your Home – a Safe, File Cabinet, etc.

You can keep your original, signed will at home – in the safe, or … file cabinet. You will want to make sure your executors / beneficiaries can find it when the time comes.

With 5 kids, having a will is critical for us – with each birth, we always have our will re-done – it gives us a chance to stop and look at the rest of our finances (life insurance rider for the newest addition, re-examine our retirement accounts and reassess where we are at financially). Your will should be one of your top priorities in taking care of your family.