Surveys by various organizations estimate that approximately half of all American adults do not have a will. There is a popular misconception that wills are for the rich – and therefore, are costly. Will preparation, however, with the proper professional guidance, can be accomplished in a very cost-effective manner. Moreover, the true concern should not be the cost of the will, but rather, the lost opportunity to have your final wishes carried out. This is the true cost, or so to speak, lost opportunity cost, in failing to have a will drafted.
Indeed, wills dictate how personal belongings and assets should be distributed to your loved ones. Without a will, the court makes these precious decisions on your behalf. A will in any circumstance is a must – especially if you have children. Very few people have any sense of when or how their deaths will occur in the future, but if you die suddenly without a will, you’ll be subjecting your family and loved ones to confusion and concern at what is already a difficult scenario.
At the very least, a will should do the following: (i) appoint a guardian if you have minor children; (ii) appoint an executor to administer your will when you die; and (iii) spell out specifically how you want your property distributed. Although the main objectives may seem straightforward, determining exactly who you want to appoint as your guardian and administrator involve a considerable amount of thought. These individuals will act as fiduciaries to carry out your last requests. Moreover, taking into account all the property in your possession is a detailed task. Typical property considerations include the following items:
- Life insurance policies, including annuities
- 401(k), IRA, pension/retirement accounts
- Any ownership interest in a business
- Cars, boats, planes and other vehicles
- Real estate
- Savings – e., bank accounts, CDs, money markets
- Investments – e., stocks, bonds, mutual funds, CDs
Not only do you need a will, regardless of the size of your assets, but your circumstances change over time – as such – your will needs updating. For example, your marital status may change; you will likely experience an increase in income or net worth; or the birth or death of family members may occur.
There are many do-it-yourself software packages on the market for drafting and updating wills. This approach can be used, but should be limited to the most straightforward of testamentary situations. If your circumstance involves some type of complexity, or if there is anything you don’t understand, consult an attorney.