Most Americans do not have an estate plan, and many that do have one, do not have a will. You may think that you do not have enough net worth for a will to make sense, you do not need one because you have a trust, filled out beneficiary designation forms for your retirement accounts and life insurance, or other reasons.
- So, do you actually need a will? In short, yes, you do. Not only you, but everyone who owns anything need a will. A will expresses your desires of how you want your property distributed after you do. If you do not have a will, you have no control over that and state law governs where your property goes. Even if you have a trust, beneficiary designations, or jointly owned property, you want a will even as a back-up.
- Even separate from controlling your property, a will allows you to name a guardian for minor children.
- If you have a lot of assets that use beneficiary designations, such a life insurance policies or retirement accounts, those designations only controls those assets. You need a will to control your other property, such as a car, home, jewelry, etc. A will is just as necessary if you want to give any assets to a charitable organization.
- If you do not have a will, you die intestate. This means that the state governs where your property goes. The process of determining where your property goes can be more costly and time-consuming if you do not have a will.
- A will also gives you more flexibility if you have a complex family situation, such as a blended family, cohabitation, step-children, disinheritance, and other issues. Relying on state laws may mean that your property is distributed unevenly or unfairly.
- You can also use the will to discourage fights over your property through using a no-contest clause.
- A will’s first purpose is to give you control over passing your wealth to your loved ones after you die. This passing on of your property happens through a process called probate. This is intended to give you control over your property after you die. You should not leave this to chance, but creating a will gives you more ownership over your property.