Making a will is one of the most important steps you should take in your life. Not only does it help you provide for your spouse, children and others, it allows you to plan out exactly how you would like things to be handled after you are gone. A good will must be able to answer some very important questions. The answers to these questions make up the major components of a will. These components are covered below.
Components of a Will
What property should one include in his or her will? The common misconception is that unless you have a few houses, a business, or a large sum of money in the bank, you do not need a will. But what if you own one house? What about the furniture in the house? How about your jewelry? What about insurance policies or retirement accounts? Everybody owns something. These are your assets. This is your estate. In a will you have the chance to decide how these assets should be distributed. Without a will, the court will make these decisions based on the governing state laws.
Who should inherit your assets? In the will context, the people who receive them are the beneficiaries. The assets are distributed based on the instructions you lay out in your will. Beneficiaries can be family members, friends or charitable organizations. The items that you leave behind for your beneficiaries can be specific as in a particular piece of jewelry or a car, or general, such as a sum of money without a specified source.
Who will oversee your affairs and distribute the assets? An executor is the one that collects and manages your assets. He or she pays any debts, expenses, and taxes and distributes the assets according to the instructions in the will. An executor can be a person or an institution. The position of an executor is of great importance and carries significant responsibilities; therefore, it is crucial that you choose someone who is honest, trustworthy and responsible.
Guardian of Minor Children
Who will take care of your minor children? A guardian is someone who is responsible for children’s care if both parents pass away before the child turns 18. Parents can choose the same or a different person to also manage and oversee any assets that were left to the child.
Importance of a Will
Now that you know the major components of a good will, you might ask why you need one. Don’t the laws cover all of these components regardless of whether you have a will or not? There are many reasons why you should have a will in place, and we look at a few main reasons below.
You get to decide how to distribute your assets and who your beneficiaries are. A will is a legal document. It embodies all your wishes and desires and ensures that they are carried out. It allows you to choose who receives your assets and what assets they receive. Also, a will allows you to disinherit people. Without a will, your assets are distributed according to the governing state laws and your beneficiaries are designated according to the governing state laws as well. Having documented your wishes and desires helps minimize arguments and fights among family and friends as to what they believed your intentions to be.
You get to decide who should take care of your minor children. Having a will allows you and your spouse to have a chance to evaluate your choices and make an informed decision. You can choose a guardian who would be able to provide for your children as you would have provided for them. Without a will in place, it is left to the court to decide which family member or state-appointed guardian should take care of your children. A court appointed guardian might not know your children and their needs as well as you do.
You get to decide who will oversee your affairs and distribute your assets. Similar to guardianship, having a will allows you to evaluate your choices and pick someone you view as honest and trustworthy. Without a will in place, the court appoints an executor.
A will allows your beneficiaries to avoid a lengthy probate process. Every estate, whether there is a will in place or not, goes through probate. However, having a will allows for a simpler and speedier process. The court will know beforehand how to divide the assets, who will receive a portion of the estate, who the executor should be, who the guardians will be, etc. Without a will, the court has to make all of these decisions.
A will allows you to minimize estate tax. Having a will in place allows you to plan ahead. You can use different estate planning tools such trusts and pour-over wills to minimize the amount of estate tax that would otherwise have to be paid.
You get to decide how you will be remembered. A will allows you to plan for gifts and donations to charities, art institutes, museums, or other causes close and dear to your heart. Through this you will be able to show your beliefs and values and allow for your legacy to live on.
As the last and most important reason, a will allows you to plan for tomorrow. A will is not set in stone. It is meant to be changed as life circumstances change. It is hard to accept death as a reality of life. However, accepting this reality and planning for it allows you to ease the pain and burden on your family and friends during a hard and emotional time.
As always, it is important to note that every case is different and not all of the applicable rules and exceptions could be listed in this post. If you are interested in learning more about wills and creating one, contact us at 1-844-HOLBORN and one of our estate planning attorneys will be happy to assist you.
Disclaimer: This post is meant for general informational purposes only, and it is not to be construed as legal advice. As with any laws, the information in this blog post may change at any time and may apply differently in different jurisdictions. The post may constitute Attorney Advertising as defined by the rules of professional responsibility of some jurisdictions. Holborn Law is based in Orange County and Riverside.The attorneys of Holborn Law APC are active members of the State Bar of California and licensed to practice law in California. All services relating to immigration and naturalization provided by Holborn Law APC are provided by active members of the State Bar of California or by a person under the supervision of an active member of the State Bar of California.