Introduction To Wills

Lisa Smith is a freelance writer with a passion for financial journalism, contributing to lớn popular truyền thông media outlets like vsao.club và Bloomberg BNA.

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Anthony Battle is a financial planning expert, entrepreneur, dedicated life long learner and a recovering Wall Street professional. He has been working in the finance industry for 15+ years & is a fierce advocate for including financial literacy as a basic educational requirement in public education.

A will is a legal document that sets forth your wishes regarding the distribution of your property & the care of any minor children. If you die without a will, those wishes may not be carried out. Further, your heirs may end up spending additional time, money, & emotional energy to settle your affairs after you"re gone.


Wills can vary in their effectiveness, depending on the type, though no document will likely resolve sầu every issue that arises after your death. Here"s what you need to know about these vital documents.


A will is a legal document that spells out your wishes regarding the care of your children, as well as the distribution of your assets after your death.Failure khổng lồ prepare a will typically leaves decisions about your estate in the hands of judges or state officials & may also cause family strife.You can prepare a valid will yourself, but you should have the document witnessed khổng lồ decrease the likelihood of successful challenges later.To be completely sure everything is in order, consider having your will prepared by a trusts & estates attorney.

Why You Should Have sầu a Will

Some people think that only the very wealthy or those with complicated assets need wills. However, there are many good reasons khổng lồ have a will.


You can be clear about who gets your assets. You can decide who gets what & how much.You can keep your assets out of the hands of people you don"t want to have them (lượt thích an estranged relative).You can identify who should care for your children. Without a will, the courts will decide.Your heirs will have sầu a faster & easier time getting access to your assets.You can plan khổng lồ save sầu your estate money on taxes. You can also give gifts and charitable donations, which can help offmix the estate tax.

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 witnesses" presence. It"s arguably the best insurance against successful challenges to lớn your wishes by family members or business associates after you die. You can write one yourself but have sầu it prepared by a trusts và estates attorney for greater insurance.


Other Types of Inheritance Wills

While a testamentary will is likely your best bet, several other types of wills get varying degrees of recognition.


Holographic wills

Wills written và signed by the testator but not witnessed are known as holographic wills—from the less common secondary meaning of the word holograph, meaning a document hand-written by its author. Such wills are often used when time is short & witnesses are unavailable, for example, when the testator is trapped in a life-threatening accident.


Holographic wills are not recognized in some states, however. In states that permit the documents, the will must meet minimal requirements, such as proof that the testator wrote it & had the mental capacity to bởi so. Even then, the absence of witnesses often leads to challenges lớn the will"s validity.


Oral wills

Least widely recognized are oral wills, in which the testator speaks their wishes before witnesses. Lacking a written record, or at least one prepared by the testator, courts do not widely recognize oral wills.


Pour-over wills

Another type of will, a pour-over will, is used in conjunction with creating a trust inkhổng lồ which your assets flow. (See "Wills & Trusts" below.)


Mutual wills

A married or committed couple usually executes this type of will. After one buổi tiệc ngọt dies, the remaining buổi tiệc ngọt is bound by the terms of the mutual will.


Mutual wills can be used to lớn ensure that propertypasses to the deceased’s children rather than lớn a new spouse. Because of state differences in contract law, a mutual will should be established with a legal professional"s help. Though the terms sound similar, a mutual will should not be confused with a joint will.


What Does a Will Cover?

A will allows you to lớn direct how your belongings—such as bank balances, property, or prized possessions—should be distributed. If you have sầu a business or investments, your will can specify who will receive those assets & when.


A will also allows you to direct assets lớn a charity (or charities) of your choice. Similarly, if you wish lớn leave assets khổng lồ an institution or an organization, a will can assure that your wishes are carried out.


While wills generally address the bulk of your assets, some aren"t covered by their instructions. Those omissions include payouts from the testator"s life insurance policy. Since the policy has specified beneficiaries, those individuals will receive sầu the proceeds. The same will likely apply for any investment accounts that are designated as "transfer on death."


There"s a key exception: If the beneficiaries of those assets predeceased the testator, the policy or trương mục then reverts khổng lồ the estate & 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.


Most states have sầu elective-tóm tắt or community property laws that prevent people from disinheriting their spouses. If a will assigns a smaller proportion of such assets to lớn the surviving spouse than state law specifies, which is typically between 30% & 1/2, a court may override the will.


In addition lớn directing your assets, a will states your preferences for who should take over as guardian for your minor children in the event of your death.


Wills and Trusts

A will is also helpful even if you have a trust—a legal mechanism that lets you put conditions on how your assets are distributed after you die and, often, khổng lồ minimize gift và estate taxes. That"s because most trusts khuyến mãi only with specific assets, such as life insurance or a piece of property, rather than the sum total of your holdings.


You might also consider setting up a trust as a way to lớn provide for a beneficiary who is underage. Once the beneficiary is deemed capable of managing their assets, they will receive sầu possession of the trust.


Even if you have what"s known as a revocable living trust into which you can put the bulk of your assets, you still need what"s known as a pour-over will. In addition khổng lồ letting you name a guardian for your children, a pour-over will ensure that all the assets you intended to lớn put into the trust are put there, even if you fail khổng lồ retitle some of them before your death.


Any assets that are not retitled in the name of the trust are considered subject to lớn probate. As a result, if you haven"t specified in a will who should get those assets, a court may decide lớn distribute them to heirs whom you may not have chosen.

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If a will leaves less to a spouse than state law requires, that part of the document may be overridden, và the spouse awarded the mandated amount.


What Happens if I Don't Have sầu a Will?

If you die intestate—that is, without a will—the state oversees the dispensation of your assets, which it will typically distribute according khổng lồ a mix formula.


Because of the elective-giới thiệu và community property provisions mentioned above sầu, the formula often results in half of your estate going to lớn your spouse & the other half going khổng lồ your children. Such a scenario sometimes results in the sale of the family home or other assets, which can negatively affect a surviving spouse who may have sầu counted on the bulk of your assets to lớn maintain their standard of living.


Further complications may ensue if your children are minors, as the court will appoint a representative sầu lớn look after their interests.


Dying intestate may have sầu tax consequences, too, since a properly prepared will can reduce the estate tax liability. As of 2021, a U.S. estate tax return must be filed on individual estates valued at $11,700,000 or more. No federal estate tax is due if the estate is worth less than that amount.


Getting Started on Your Will

To prepare a will, begin by compiling a các mục of your assets and debts. Be sure to lớn include the contents of safe deposit boxes, family heirlooms, và other assets that you wish to transfer to lớn a particular person or entity.


If you wish lớn leave particular personal property to specific heirs, begin a các mục of those allocations for eventual inclusion in your will. Besides, you can identify the recipients of specific assets in a separate document called aletter of instruction, kept with the will. However, if you include assignments only within this letter, kiểm tra that the document is legally binding where you live; some states bởi not recognize them.


The letter of instruction can be written more informally than the will. It can also include specifics that will help your executor settle your estate, including account numbers, passwords, and even burial instructions. Other addenda to the will, such aspower of attorney, a medical directive, or a living will, can direct the court on handling matters if a person becomes physically or mentally incapacitated.


If both you và your spouse lachồng wills, you might be tempted lớn prepare a single document that covers you both. Resist the temptation. Estate planners almost universally advise against joint wills, and some states don"t even recognize them. Separate wills make more sense, even if your will and that of your spouse may end up looking remarkably similar. (As noted above, a joint will is not to be confused with a mutual will.)


How khổng lồ Prepare & Validate Your Will

You don"t necessarily need professional help to prepare a valid will. If you are comfortable taking care of the task on your own, several software programs are available to lớn assist you, as are various DIY websites.Once you"ve sầu drafted the document, it needs to be witnessed, usually by two adults of sound mind who know you well.


Any person may act as a witness khổng lồ your will, but it"s best to pick what"s known as a disinterested witness—someone who isn"t a beneficiary và has no financial or personal stake in your choices. Some states require two or more witnesses. If a lawyer prepared the will, they shouldn"t serve sầu as one of the witnesses.


In some states, a will must also be notarized, so check the rules where you live sầu. Even if that formality isn"t required, you might consider having your witnesses complete what"s known as aself-proving affidavit. Signedin the presence of a notary, the document may facilitate the probate process by reducing the likelihood witnesses will be called inkhổng lồ court to lớn validate their signatures & the will"s authentiđô thị.


Choosing an Executor for Your Will

You"ll need lớn name a still-living person as theexecutorof the estate. That person, often a spouse, adult child, or another trusted friover or relative, is responsible for administering the estate. You can also name joint executors, such as your spouse or partner and your attorney.


Theprobate courtusually supervises the executor to ensure that theycarry out the wishes specified in the will. If your affairs are complicated, it might make more sense to lớn name an attorney or someone with legal và financial expertise.


The case for engaging an attorney is strong if your estate is substantial (ranging in the millions of dollars) or your situation is legally complex. If so, be sure to work with someone who is familiar with your state"s laws & has extensive experience with writing wills. Your state bar association may be able khổng lồ help you locate a suitable attorney.


One of the most important things your will can do is empower your executor topay your billsandgiảm giá khuyến mãi with debt collectors. Ensure the wording of the will allows for this & gives your executor leeway khổng lồ take care of any related issues that aren"t explicitly outlined in your will.


Where to lớn Keep a Will

A probate court usually requires access to lớn your original will before it can process your estate. It"s crucial, then, to lớn keep the document where it is safe và yet accessible. Avoid storing it in a bank safety deposit box or in any other location where your family may need a court order to gain access. A waterproof & fireproof safe in your house is a good alternative.


Then let at least your executor know where the original will is stored, along with needed information such as the password for the safe. Besides, it"s wise lớn duplicate signed copies to lớn the executor & your attorney if you have sầu one. The signed copies can be used to establish your intentions in case the original is destroyed or lost. However, the absence of an original will can complicate matters, & without it, there"s no guarantee that your estate will be settled as you"d hoped. So store the document with care.


How to lớn Change a Will

Your will may never need lớn be updated. Or, you may choose lớn update it regularly. Rethành viên, the only version of your will that matters is the most current valid one in existence at the time of your death.


A good rule of thumb: review your will every two or three years & at pivotal moments in your life. Such events might include marriage, divorce, or the birth of a child. Your kids probably won"t need guardians named in a will after they"re adults, for example.


Changing your will is easy. You write a new will to replace the old one or make an addition using an amendment known as a codicil. Because of the serious nature of codicils & their power to change the entire will, two witnesses are usually required khổng lồ sign when a codicil is added, much lượt thích when the originalwillwas created. Some states, however, have loosened the legal regulations surrounding codicils & now allow for them to be notarized at apublic notary.


Ideally, you want to make any changes when you are of sound mind và in good health. This limits the likelihood that your wishes can be successfully challenged and avoids decisions made in haste or under intense emotional pressure.


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