Where There is a Will, There is a Way
You may wonder whether you need a will. You might think that you are too young, or that you don't have enough assets to make it worthwhile to prepare a will at this point in your life. If you're nodding yes, you are not alone – over half of Americans have not prepared a will.
What is a Will?
A will is a document in which you lay out your wishes and plan for how you would like your assets to be distributed, and perhaps even more importantly, whom you would like to care for your minor children in the event that both parents are deceased.
Hiring a Lawyer vs. Doing it Yourself
Do-it-yourself estate planning forms are widely available, but in the long run they are often more harmful than helpful. Most estate planning forms do not consider the constantly changing estate tax laws, and do not ensure against inconsistencies between estate planning documents. It is worth the cost to do it right up front; it is less expensive in the long term to have properly prepared documents.
Who Will Receive Your Assets?
When there is no will, the court divides a decedent's assets according to what is called the "law of intestacy." These laws divide property in the manner that the state legislature assumes that most people would like their property divided. But this may not be the way that you would like your property to be divided.
For example, Washington law provides that children receive property and funds left to them at age eighteen. Many parents do not believe that their children are prepared to receive their full inheritance at such a young age. A will with a testamentary trust can be crafted to allow funds to be distributed over time, or to be distributed only for specified expenses, such as college tuition. Using this estate planning tool will allow you to direct how you would like funds to be distributed, and to ensure that funds are held for the long-term benefit of your child.
Perhaps you would like to make a bequest to a charitable organization, or a friend, or a specific relative. Writing a will also allows you to do this. You also have the ability to determine how much of your estate you would like to go to each individual or organization. You can make bequests of specific amounts, or a particular percentage or fraction of your estate.
A will also gives you the ability to designate whom you would like to receive specific items of real or personal property. Maybe you have a classic car that you know your cousin would love to receive, or maybe you want to be certain that your daughter receives a cherished piece of jewelry.
Who Will Care for Your Minor Children?
You probably have strong opinions about whom you would like to care for your minor children if you were no longer able to do so. If there is no will, the court will determine who is to be the child's guardian in the event that both parents are deceased.
If you identify in your will whom you would like to be your child's guardian, then the court will confirm that individual as guardian, unless the court determines that the person you nominated is not qualified to serve. In general, the court would make sure that the person is over eighteen, has the mental capacity to serve as a guardian, has not been convicted of any felonies, or otherwise generally unsuitable.
How Do I Get Started?
One of the first steps is to start thinking about the unthinkable – what if you suddenly passed away? Whom would you like to receive your assets, and whom would you like to care for your children? You may wish to start by making a list of all of your assets – your home, bank accounts, valuable personal property such as art, and anything else you can think of. Next, start brainstorming about whom you would like to receive these things, and how you would like your property to be managed for the benefit of your children.
Finally, start thinking about whom you would like to designate as a guardian for your children. For most couples, this is a decision made together, with both parents nominating the same guardian. You may also designate an alternate guardian in the event that the guardian you name is unable or unwilling to care for your children.
You will also need to select someone whom you would like to serve as your personal representative, also known as the administrator or executor. This is the person who actually manages the distribution of your estate. If your estate plan includes a trust, you will also need to designate a trustee. This individual will be responsible for ensuring funds are distributed according to the trust terms which you have established in your will.