As estate planning attorneys, we regularly work with clients spanning in age from eighteen-years-old to those in their nineties; there’s no “one-size-fits-all” age when a person must invest in a will or living trust. However, every adult needs a plan.
When most people think of estate planning, they simply think of a will. In reality, estate planning can involve a variety of tools, including wills, revocable living trusts, advanced healthcare directives, powers of attorney, and more. However, for the sake of simplicity, let’s begin by looking at wills, what they accomplish, and who should have one.
What is a will?
A will is a legal document that will accomplish some very important goals, including:
- Name guardians for minors
- Name the personal representative
- Name the beneficiaries
When you create a will you document your wishes for the care of your children and the distribution of your assets after your death.
What happens if I die without a will?
When a person passes without a will it is called “dying intestate.” In this event, the state will create a plan for you. Typically, if you have a spouse and/or children, they will inherit your assets. However, this is not always the case, and the choice to determine who will inherit your assets is taken away from you and your loved ones. If you don’t have a spouse or children, the distribution of assets can become even more complex without a will in place.
When do I need a will?
If you’re married
If you are married it’s a good idea to create a will and specifically document your wishes for your spouse to receive your assets. Although the state would likely determine a portion of your assets should go to your spouse, it’s a much safer option to document your wishes rather than rely on a court process.
Additionally, if there is someone other than your spouse who you want to receive specific assets, that wish needs to be documented as well. If you pass away without a will, loved ones other than your spouse may never see any part of your estate despite your intentions.
If you have children
If you are a parent, creating a will is critical. As previously mentioned, one of the most important things you will do in creating a will is to name guardians for minor children in the event of your and your spouse’s deaths.
Additionally, as with planning for your spouse’s wellbeing, it’s best not to rely on the court to determine that your children will inherit your assets, but to document those specific wishes.
And while it’s not a happy consideration, if you wish to disinherit any of your children or want to ensure that your children only inherit certain assets, rather than equal shares of your estate, these wishes also need to be documented. Another consideration for planning is deciding when and how your children should inherit your assets.
If you have substantial assets
If your estate consists of multiple high-value assets, it is worthwhile to take the time to document what you would like to happen to those assets after you pass away. A lack of clarity can cause tension and conflict among family members or loved ones who don’t know what you wanted to take place after your death and are all vying for a piece of the pie.
In fact, if you have a large enough estate, own property in multiple states, and/or value your privacy, it is likely worthwhile to consider a revocable living trust. A living trust is a will alternative that can help your loved ones avoid probate and keep the details of your estate out of the public record.
What if none of these considerations applies to me?
If you’re young, single, and do not have any sizable assets, it’s possible you don’t yet need to feel pressured to create a will. However, that does not mean that you shouldn’t have a plan. Once you turn 18-years-old, there are certain estate planning documents everyone should have in place, including:
- An Advanced Healthcare Directive
- A Durable Power of Attorney (based upon incapacity)
- A HIPAA Waiver
A typical goal of people considering the creation of an estate plan is to make things easier for their loved ones upon incapacity and at death. Having an estate plan, even if it isn’t a will, is a good way of achieving this goal.
These three estate planning documents will allow for a family member or loved one to help take care of you if you’re ever incapacitated and unable to make medical, legal, or financial decisions for yourself. If you don’t have these documents in place, your loved ones will need to face a court process to gain the legal ability to help make these critical decisions.
Additionally, it’s important to check to make sure you have an up-to-date beneficiary named for any assets that can be transferred by beneficiary designation (i.e. bank accounts).
Estate planning is not a one-and-done event.
Many, if not most, people assume that creating a will is a one-time life event. While this would be convenient, the reality is that your estate plan should address your goals and concerns at your current life stage. This means your plans will likely need to be reviewed and updated in the future as your concerns, family, and assets change.
The attorneys at Guttman Law recommend reviewing your estate plan every three to five years or any time a major life change occurs. If you’re wondering if it’s time to create a will or what estate planning tool makes the most sense for your unique situation, call our team at (612) 431-1600 for a no-cost, no-obligation consultation.