Nineteenth century author Ambrose Bierce once said, “Death is not the end. There remains the litigation over the estate.” Humor aside, dying without a will is a sure way to leave your loved ones a legal mess in the probate court and family feuding over who gets what. But you can spare them that difficulty. We’ll explain on MoneyWise.
- So let’s get into the reasons why you need to draw up a written will if you haven’t already, and along the way we can dispel some of the misconceptions about wills.
- Without a will, it will be up to probate courts to determine how your estate will be handled upon death. State law will determine who gets what, and that may be contrary to your wishes.
- PREPARING A WILL IS AN ACT OF LOVE TOWARD YOUR LOVED ONES
- Maybe the biggest reason that you need a will is that it will reduce the likelihood of family disputes after you’re gone. In a will, you can leave specific instructions as to who gets what, potentially eliminating all the squabbling.
- It’s true that your heirs could still have hard feelings even if inheritances are clearly spelled out, but a will isn’t just a set of instructions. It’s a document that can express not just your intentions, but your reasons behind them.
- Our friend Ron Blue spells this out clearly in his book, Splitting Heirs. “Simply dividing up your assets equally might be fair, but it isn’t necessarily biblical. Ron says, “Wisdom can create wealth, but wealth almost never creates wisdom.”
- One child may not be capable of handling money, or another might have much greater needs than your other heirs. So explaining why you’re dividing things a certain way can also help eliminate family fighting. Ron also says that if you love your children equally, you’ll treat them uniquely.
- There are other reasons to draw up a will. It’s a great way to itemize your assets. Without a specific list of your holdings and possessions, the probate court could take months or years sifting through your financial records.
- Another good reason to draw up a will is that it can help you provide for heirs with special needs. If one of your heirs is too young or immature to manage money, you can place restrictions on the inheritance with a will. You can also do that with a living or revocable trust.
- A WILL ALLOWS YOU TO DECIDE WHO WILL CARE FOR YOUR CHILDREN
- There’s one more really important reason for having a will, and this one’s often a real sticking point for couples with children. A will enables you to name a guardian for your children. This is one of the reasons that some parents procrastinate in making out a will, because it forces them to decide who will care for the kids should something happen to them. That’s not a pleasant thought and quite often, it’s a tough decision to make.
- MISCONCEPTIONS ABOUT WILLS
- Turning now to some of the misconceptions about wills, the one you hear most often is, “I don’t need one.” But we just talked about how a will allows you to name who’ll care for your children if something happens to you. Without a will, the state decides who raises your kids as well as who gets all of your assets.
- Another misconception is that your spouse automatically gets everything you have, so you don’t really need a will. That’s the case most of the time, but different states have different rules.
- For example, your state may require that your assets be divided equally among your spouse, children or grandchildren, whether you wanted that or not. So you can’t assume your spouse will inherit everything. You can avoid all that by having a will in place.
- Okay, our last myth is, “drawing up a will is too expensive.” The truth is, writing a will is one of the least costly things that attorneys do. Many of them charge a flat fee to write a will or other basic estate planning documents. The average cost for drawing up a will is around $500.
- Of course, you can do it even cheaper by filling in the blanks at one of those online legal form sites. That may work just fine, but an attorney can help you address issues that may not come up with the “do it yourself” approach.
- And of course, you can find an attorney or estate planner who shares your values when you look for a Certified Kingdom Advisor at MoneyWise.org.
On this program, Rob also answers listener questions:
- What is the purpose of work (working for a living)?
- What is an ideal amount to have saved in a 401k at age 48?
- How can you move money from a 401k into a Roth IRA, and would that make sense?
- How do you determine what to do with your money after becoming debt free?
- What is the best way to learn the basics of budgeting and managing money?
RESOURCES MENTIONED DURING THIS PROGRAM
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