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What is A Will?

A Will is a legal document that specifies your wishes regarding the distribution of your property and assets and the care of any dependents after your death. Without a will, your estate may not be distributed according to your preferences, and your loved ones could face added stress, time, and costs in settling your affairs.

While no document can cover every potential issue that arises after death, a last will and testament comes close, allowing you to outline your instructions for your property and the care of your loved ones. Here's a breakdown of what you need to know about these essential documents.

Key Takeaways

  • A will outlines your wishes for asset distribution and the care of dependents after your death.
  • Without a will, state officials or the courts will make decisions on your behalf, potentially causing family disputes.
  • While you can write your own will, having it witnessed helps prevent challenges later on.
  • Consider consulting an attorney specializing in estate planning for more peace of mind.

Why You Should Have a Will

You might think that only the wealthy need a will, but everyone can benefit from having one. Here are a few reasons why:

  1. Clear Distribution of Assets: Specify who gets your property, how much, and when.
  2. Protect Your Loved Ones: Ensure your assets don't fall into the hands of estranged relatives.
  3. Appoint a Guardian for Minor Children: Without a will, the courts will decide who cares for your children.
  4. Faster Access to Assets: Having a will simplifies the process for your heirs.
  5. Tax Planning: You can plan to reduce your estate's tax liability and make charitable donations.

A Written, Witnessed Will Is Best

To maximize the likelihood that your wishes will be carried out, create what's known as a testamentary will. This is the most familiar type of will; you prepare the document and then sign it in the presence of witnesses. It's arguably the best insurance against successful challenges to your wishes by family members or business associates after you die. You can write a will yourself, but having it prepared by a trusts and estates attorney tends to ensure it'll be worded precisely and correctly and in keeping with your state's laws.

What Does a Will Cover?

A will allows you to specify how your property, bank accounts, and personal belongings should be distributed. You can even direct assets to charities or organizations. However, a will doesn’t cover everything:

  • Life Insurance Proceeds: These pass directly to designated beneficiaries, not through your will.
  • Transfer-on-Death Accounts: Designated beneficiaries receive these accounts outside the will. There's a key exception: If the beneficiaries of those assets predeceased the testator, the policy or account then reverts to the estate and is distributed according to the terms of a will or, failing that, by a probate court—a part of the judicial system that primarily handles wills, estates, and related matters.
  • Elective-share Laws: In some states, your spouse cannot be disinherited and is entitled to a portion of your estate due to community property laws. If a will assigns a smaller proportion of such assets to the surviving spouse than state law specifies, which is typically between 30% and 50%, a court may override the will.

Additionally, a will can include your choice of guardian for minor children.