Unfortunately, most people die without a will, and of those people more than 50% have children. The majority of individuals feel that they don’t have the knowledge to create a will or that it will take too much time to prepare or that they really don’t have anything to leave behind so they feel there’s no point in creating one. Let me just say that everyone has something, whether it’s your father’s journal or your mother’s favorite earrings that have been given to you or the $3,000 you have under the mattress. Everyone has heirlooms, a retirement plan, some property or a few bucks lying around, and you never want your death to become a point of contention between family members. And, the truth of the matter is that if you don’t have a will, the state will make one for you and make important decisions about your prized possessions, your children and your assets and it generally does not line up with what you would have desired.
Here are some key elements to consider in your will:
- Guardians and Trustees – A guardian is the person you place in charge of your children upon your death and it is extremely important to name the person you choose to take over these child-rearing responsibilities. A trustee is the person in charge of the financial assets associated with your child(ren). You do not want this person to hold both of these responsibilities.
- Beneficiaries and Wills – A beneficiary is someone you name through a “beneficiary designation” form at the time of creating separate accounts, such as IRAs, life insurance, and annuities. The person you name as a beneficiary supersedes anything in the will. Therefore, it is always wise to ensure that you review these beneficiary designations from time to time to make sure no changes are needed.
- Joint Property with Your Spouse is Outside of the Will – Joint property is often real estate and bank accounts shared by spouses. These wouldn’t be distributed by the terms of one person’s will; rather, they are passed to the surviving owner by operation of the law
- Gifts – There are three types of gifts that can be given at the time of your death and you must determine how and to whom they will be given:
- Specific Gifts: these are gifts of items e.g. giving your jewelry to your daughter or your golf clubs to your nephew
- Pecuniary Gifts: these are gifts of money e.g. $100 to each of your godchildren or $1000 to your favorite charity
- Residuary Gifts: your residuary estate is what is left after all specific pecuniary gifts been made and any outstanding debts have been paid