Why is it Important to Have a Will?
8 Great Reasons to Create Your WillThis is not a fun subject to talk about, and, frankly, many people remain unprepared if there’s a loss in the family because they put off creating a will. A will is a roadmap for your finances should anything happen to you. You want your assets and belongings to be distributed as you would like. A will is a definitive way to provide for those you care about, no matter your economic status.
Here are some additional reasons to create a will sooner rather than later.
1. Distribute Your Stuff
Maybe you have a lot of stuff, including financial accounts, investments, homes and automobiles. Maybe you have just a few treasured heirlooms. In any case, with a will, you legally designate which items will go to which relatives and friends, so nobody will have to guess, and the chances of infighting are minimzed.
A legally binding will has the following characteristics, which may vary slightly depending on the laws in your state, according to Willing.com:
- You must be 18 years old or older to create a will.
- You must clearly state your intent that the will is your final testament.
- You must possess the mental capacity to make the will.
- The document must bear your signature.
- Two people over the age of 18 must sign as witnesses.
- In general, laws require that a will be typewritten, although a few states allow handwritten, video and/or oral wills.
2. A Will Can Protect Minor Children
If you have children under 18, you need to provide for their futures if you are no longer present. As a parent, it is one of your core responsibilities, and it is critical that you formalize your childcare plan in your will so that it is legally binding.
According to LegalZoom, you should think about the following when considering legal guardians for your children:
- Do they have a positive relationship with your children?
- Do they have a stable home and family life?
- Do they live nearby so that your children don't have to move far away?
- Do they have the resources to care for your children?
- Do they have a relationship with your child's relatives?
- Are they are agreeable to being named guardians?
Even if you don't think it necessary to create a will because you have few assets, as a parent, you absolutely have to protect your children.3. Save on Taxes
Dying is expensive. Typically, your will must go through probate, which can be pricey, and your executor must use your funds to pay any income tax you owe. In addition, taxes on your estate will be due if its net value is above the federally mandated limits.
However, if you make some charitable bequests in your will, those funds will not be taxable, according to FindLaw.com.
4. Your Will Can Specify Donations to Charities
Telling your best friend or spouse that you want to leave money to your favorite charity when you die does not assure this will happen. Writing your wishes into your will is the only way to ensure that your money reaches the causes you care most about.
5. Name a Person to Carry Out Your Wishes
It is important that a reliable person carries out your final wishes responsibly. For that reason, a will typically names an executor. According to Nolo's legal encyclopedia*, that person's duties include taking an inventory of your estate, paying your outstanding debts, including taxes, liquidating assets to cover expenses and then distributing your bequests. Your good judgement in choosing the right executor can minimize the chances of conflict and misuse of your funds.
6. Keep Your Belongings from Those Who Would Legally Inherit Them
Say you are married and reside in a community property state. Unless you specify otherwise in your will, all your property would go to your spouse, says Nolo. However, you can designate that specific belongings, like an heirloom necklace, go instead to your granddaughter. This makes your intentions clear versus counting on someone to divvy up your belongings according to your wishes.
7. Protect Your Assets from Government Seizure
If you do not leave a will and you do not have any close relatives, you legally have died intestate, according to Investopedia. This means that if officials cannot locate any distant relatives, the state inherits your property. Rather than let that happen, you could will your belongings to a good friend or even a charity.
8. You Can Change Your Will as Your Circumstances Change
If making a will sooner rather than later seems too final, keep in mind that you can change your will at any time. You may get married or divorced, you could have children or grandchildren, or you might acquire more wealth that you need to distribute. One or more of your beneficiaries may die before you. It's your life, and it's your property, so it's your responsibility to create a will early and make changes as your life changes.
At Truliant Federal Credit Union, we offer a number of valuable resources on our website for every phase of your financial life. We can help you lay the groundwork for your family's economic well-being now and in the future. Stop in or visit us online today.
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