I am not quite sure when it happened, but one day after putting our youngest daughter down for a nap, my husband asked if it was time that we set up a will. Setting up a will is not something I had given a lot of thought to, to be honest. I knew that we had life insurance policies, with our daughters written as the beneficiaries, so I thought we were covered and a will was not too high on my list of priorities.
After that night, I found myself asking some questions: What is a will? How do I know if we need a will? Is a will really necessary? What I have learned about wills since, however, has changed my thinking.
Simply put, a will is a legal document that ensures the distribution of your property and your assets according to your wishes when you pass away. If you pass away and you do not have a will, state law governs who gets what from your property and assets. Usually your spouse and/or children will receive the inheritance, but not necessarily, so stating your wishes in a will is important. Let’s take a look at who needs a will and when. Don’t worry, we will also tell you how to get started writing a will too.
Who needs a will and when?
If you are married, you need a will.
Traditionally, spouses inherit assets when the other passes away. However, when someone dies without a will, referred to as dying intestate, state law governs. This means your estate goes into probate, a legal proceeding to determine rightful heirs and distribution of assets. Probate can be costly and time-consuming, so it is best to have a will in place naming who gets your assets.
If you have children, you need a will.
If your children are young, you want to ensure they are provided for upon your death. Do you want your children to inherit your things after your spouse? Put it in writing – aka your will. Wills are also important because you will be able to name an executor of your estate and a guardian of your children. The executor will ensure the distribution of your assets according to your wishes, and the guardian will be responsible for raising and caring for your children.
If your children are older, family dynamics can come into play, so once again, it is best to have your wishes in writing. You may need to designate specific items for specific people. For instance, your grandmother’s diamond necklace would go to one daughter, her ruby bracelet to another. What about bank accounts? Perhaps you have one child who lives nearby, so you add them onto your bank accounts for convenience. When you pass away, all those joint assets pass to that child, however, maybe you had intended the assets to be split between all of your children. There are fights over estates all the time, so having a will in place to lay it all out is important and can help reduce family conflict.
Do I need a will if I am young and single?
If you are young, single, and just starting out, you probably do not need a will. When there is no one relying on you or your income and you do not have any assets, you do not need a will yet. Alternatively, if you are young, single, and have a positive net worth, you probably do need a will. If you have assets that will need to be distributed upon your death, once again, it is best to have it in writing in the form of a will.
Some other things to consider.
A few other factors to consider when it comes to a will: do you have pets? Do you want to leave a legacy gift to a charitable organization? Do you come from a split family, and want to support one parent over another with the division of your assets? Every individual situation is different, and having a will ensures your wishes are carried out.
It is also important to recognize that a will is not a one and done sort of thing. Creating a will and then never changing it is likely not in your best interest. Updating your will as time goes on is a good idea because, as we all know, life changes. Family dynamics and relationships change, maybe you have another child, or perhaps you inherit an estate and assets from another family member and want to include that in your will. Much like regularly reviewing and updating beneficiaries on your retirement accounts, updating your will is a best practice our Des Moines Financial Advisors recommend.
How do I start setting up a will?
If you are more of a do-it-yourselfer, there are a number of online resources to help you set up a will, including LegalZoom and FreeWill. However, depending on your situation, our Des Moines Financial Advisors generally recommend contacting a local estate planner, because writing a will may raise a lot of questions and we believe you’ll want a knowledgeable team to help you. Writing a will gives you control and helps protect your assets even after your death. If you have not yet set up a will, and would like to explore your options, the Compass Financial team is here to talk with you, listen, and provide resources to help. Contact us today!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information is not intended to be a substitute for individualized legal advice. We suggest that you discuss your specific situation with a qualified attorney.