Will | Definition

Not having a will could mean your loved ones may not receive the assets you wanted them to. As a result, to prevent any unwanted misfortunes to happen after your passing, having a legal document that directly outlines your intentions can help prevent these circumstances from occurring.

A will is a legal document specifying how a person's assets should be distributed after their death. A will is necessary because it ensures that your assets go to the right people and provide for your loved ones. Yet, surprisingly, many people lack willpower. According to a recent survey, 46%, or less than half of U.S. adults, have a will. 

The person who writes the will is known as the testator. The testator can name an executor, who manages asset distribution, and beneficiaries, who will inherit those assets. Assets can range from money and personal property to personal belongings.

A will can come in various formats, including holographic, oral, and formal. An oral will is spoken and witnessed by two people, whereas a holographic will is a handwritten document that does not require witnesses. A formal will is typed and signed in the presence of two witnesses. Formal wills are the most common because they are the easiest to enforce.

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The Importance of a Will

A will is necessary for a variety of reasons. First, it ensures that your assets are distributed per your wishes. Having a will means your loved ones will not have to guess what you were thinking, and your assets won't be distributed per state laws. Second, a will provides for your loved ones, including naming guardians for any minor children, and ensuring that a portion of your assets is left to them. 

Third, a will can help avoid family feuds by specifying who should receive what. This can avoid potential legal battles while also preserving family relationships. Fourth, a will can reduce estate taxes by reducing the value of assets through charitable donations. 

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Consequences of Not Having a Will

A lack of a will can have serious consequences. For example, if a person dies without leaving a will, state laws govern how their assets are distributed. As a result, unintended beneficiaries may receive assets while family members are excluded. 

Family members may have differing views about who should receive what, leading to disagreements. Impasses within the family can delay asset distribution, causing financial stress for those left behind. In addition, if a person has minor children, the probate court will determine guardianship, which may or may not accurately reflect the testator's wishes. Finally, without a will, estate taxes may be higher because there will be no charitable donations to reduce the value of the assets.

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Creating a Will

Creating a will is a simple procedure. Sometimes it can be as simple as the four steps listed below. 

1. First, the testator should appoint an executor for asset distribution once they pass away. 
2. Second, the testator must select beneficiaries and decide who receives what. This can be accomplished by dividing assets among heirs equitably or allocating specific assets to specific beneficiaries. 
3. Third, the testator should write the will by hand or type it up. 
4. Fourth, the will must be signed by two witnesses.

Updating a Will

When life circumstances change, it's critical to update a will. The testator can create a new will or add a codicil to an existing one to update it. A codicil is a legal document that amends an existing will but must be signed and witnessed.

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The Money Wrap-Up

A will is essential for ensuring your property is distributed according to your preferences and caring for your loved ones. It can save estate taxes, enable charity donations, and prevent family disputes. If circumstances change, your will should be updated to reflect your best wishes. Ultimately, making a will is a straightforward process that can bring comfort and guarantee that your legacy is left in capable hands.

Disclaimer: The information above should not be considered legal advice. Always consult a lawyer or a legal professional to help you start your estate planning. 

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