A will, commonly referred to as a “last will and testament”, is a legal document that declares your final wishes following your death. An estate of any size can be reduced by the lack of good estate planning. This can result from many factors including poor management of wealth, and payment of taxes and expenses that might have been avoided with proper planning.
A properly drafted will can help protect your loved ones, and be sure your hard earned assets are distributed according to your instructions. This legally binding document helps minimize family fights about your estate and the need for litigation among surviving family members, which also saves more money for your loved ones.
Who will inherit?
Most married people who have children think that without a will, all of their assets will go to their spouse. That is not true. For a married person with children and without a will, only part of your probated assets would pass to your spouse. Without a will, New York State intestacy laws take over, and the State determines how your estate would be distributed. That may or may not be what you wish. There may be people you feel should not receive any of your assets, because you are not on speaking terms, or for any other reason. However, under the laws of intestacy, that person could be close to first in line. A will to ensures the proper people get what you wish, (whether they be other relatives or close friends), and disinherit those who would otherwise inherit from you. In recent years, blended families have become more common. For example, a will enables you to provide for your current wife during her lifetime, and then for your children from a prior marriage after the passing of your current wife.
The care of children is so important. A Will is where you name a Guardian for your minor children. Without that, a court would decide who would be Guardian of your children. Wouldn’t you want to make that clear? Why leave it to chance? You know your children best. You want the peace of mind knowing your children would be raised by the person you think is best for them, rather than a state-appointed guardian. In addition, a court-appointed guardian usually receives fees for their services, which in the end reduces the amount your children would receive. Further, the person you name to care for your minor children can, but need not be the same person who would handle the money for your minor children. Your will could set forth those instructions as well.
Name an Executor
A will is where you name the person who will be in charge of your Estate. This is your Executor. Your Executor will marshal your assets, pay all your debts, make sure all necessary documents are filed with the Courts and the Taxing Authorities, and then distribute your assets. This should be a person who you trust, and is organized. It may or may not be a family member who has those qualities; all the more reason to formalize your choice in this document now.
Your Will is the mechanism to give specific items to certain people. There may be special (or heirloom) items you want a particular person to receive. A will provides the ability to name people or charities to receive certain amounts of assets. You also have the opportunity to “equalize” gifts already made to certain parties (such as children) during your life with provisions in your will for others to receive more after your death.
In next week’s post we will be addressing part 2 which include the 4 additional reasons you should have a will in place.