Parents may not like to dwell upon their untimely deaths, but creating a will now will help ensure your family’s finances.
A will is a legal document that specifies how to distribute your assets and investment accounts to your family and others should you die. It’s important to understand what a will can do as you plan for your family’s future.
– You need a will to work your will. Dying intestate (without a will) turns important decisions over to a state probate court judge who will follow standard procedures to distribute your wealth. A will allows you to name your beneficiaries and the amount they inherit, which might be very different from what the state considers to be standard.
– If you have children, you can designate a guardian in your will rather than leaving the decision to the state. Naming a guardian protects your children from state custody and ensures a trusted person looks after their future.
– Your will can also establish trusts that start upon your death. Using trusts, you can address specific concerns, such as caring for a special needs child, managing your investment portfolio, or preventing a child from misusing a legacy intentionally set for college expenses. You can fund your trusts from various sources, such as life insurance policies, and set the conditions for distributing the money.
– Plan payments for debts and taxes. Your will can lay out how to repay any remaining debts and taxes. You also can use your will to make charitable gifts and thereby reduce the size of your estate. In some cases, this will lower or eliminate the burden of estate and/or inheritance taxes upon your family.
– Setting up a will is worth your time. When you consider the advantages of a will, the effort to create one is a small price to pay. Before meeting with a qualified attorney to establish your will, review your financial portfolio with a trusted financial advisor. If you have any questions about your finances, we are here to help!
If someone you love has passed, there are important steps you should take. For more information, check out our estate planning resource: Steps To Take When a Loved One Passes.