Your assets could end up in the state’s hands to distribute if you die without a will.
The state laws, not your wishes, will determine how your assets are distributed if you die “intestate” – the legal term for dying without a will. Setting up a will is more affordable than most people realize. Legal assistance costs between $300 to $1,000.
This piece covers everything about wills – their purpose, importance, capabilities, and limitations. Your wishes deserve protection, and your loved ones deserve care exactly as you envision.
What Is a Will and Why Do You Need One?
A will lets you spell out exactly what happens to your property, assets, and dependents after you die. This legal document speaks for you when you can’t anymore.
Your will gives you the ability to:
- Pick who gets your possessions
- Choose guardians for minor children
- Select an executor to handle your estate
- Maybe pay less in estate taxes
Many people think wills are just for the wealthy. That’s not true at all. Everyone should have one, whatever their financial situation. A 2021 Gallup poll shows only 46% of US adults have created a will. This number rises to 76% for people over 65.
The collateral damage of dying without a will (“intestate”) can be huge. State intestacy laws will decide who gets your assets, not your personal wishes. On top of that, it makes the probate process harder, costlier, and slower for your family.
Unmarried couples face bigger problems if someone dies without a will. Intestacy laws usually only recognize blood relatives, married spouses, or adopted family members. This means your partner might end up with nothing if you don’t have the right paperwork.
Your will also lets you name someone to manage your estate. The court picks the first person who asks for the job without a will. This choice might not match what you want.
Remember that wills work with other estate planning tools like trusts. While your will covers individually-owned assets, you might want to think over revocable trusts (changeable during your lifetime) or irrevocable trusts (usually permanent) to meet specific estate planning needs.
Making a will puts you in charge of your legacy instead of leaving these big decisions to state laws and courts.
What Does a Will Allow You to Do?
A will gives you control over what happens after you’re gone. State laws decide everything when you die without one. But a will puts you in the driver’s seat to make key decisions.
Your will lets you distribute property exactly how you want. You decide who gets your assets – from your home and car to family heirlooms and financial accounts. You can provide for individuals whom state intestacy laws would typically exclude. This includes stepchildren, godchildren, friends, or charitable organizations.
The ability to name guardians for your minor children stands out as a vital part of your will. This helps reduce court involvement in your child’s care if you’re the surviving parent. Your children might enter the child services system without a named guardian. Siblings could end up separated in foster care.
You can appoint an executor (personal representative) through your will to manage your estate. This person you trust will collect assets, pay debts, file tax returns, and distribute your property based on your wishes. You can also remove the need for an executor’s bond, which saves your estate money.
Family conflicts over inheritance often decrease with a well-laid-out will. You might add a no-contest clause to discourage disputes. This clause states that any beneficiary who challenges the will and loses will forfeit their inheritance.
Your will works among other estate planning tools like revocable living trusts. While your will handles individually-owned assets going through probate, trusts offer different benefits. They let you put assets in trust during your lifetime while you continue to use and spend them.
A proper will makes sure your final wishes are respected. Your loved ones will receive what you intended them to have.
What Doesn’t a Will Cover?
Learning how to set up a will matters, but you need to know what it can’t do. Your will doesn’t cover everything you own.
A will can’t control jointly owned property. Assets shared with rights of survivorship automatically go to the surviving owner when you die, regardless of what your will says. To cite an instance, a house you own with your spouse or a joint bank account passes directly to the co-owner outside of probate.
The same applies to assets that have designated beneficiaries. These skip your will completely:
- Retirement accounts like 401(k)s and IRAs
- Life insurance policies
- Annuity contracts
- Bank accounts with “payable on death” designations
Your will’s beneficiary choices don’t matter for these assets – the account designations win. These accounts might end up in probate if you haven’t named any beneficiaries.
Trust property stays outside your will’s reach too. Any assets in your 20-year-old trust (revocable or irrevocable) follow the trust document’s instructions, not your will.
Your digital assets create extra complications. Email accounts, social media profiles, cryptocurrency, and other online accounts have specific rules about access after death. Your heirs might find it impossible to access these assets without proper digital estate planning.
Our digital world makes complete estate planning crucial. You’ll need more than just a will to protect everything – think trusts, beneficiary designations, and a digital asset inventory that includes access instructions.
Conclusion
Your will speaks as your final voice and will give your loved ones clear direction after you’re gone. Many people put off making one, but dying without a will leads to severe consequences – from unplanned asset distribution to your family’s complicated probate processes.
You maintain control over vital decisions through your will, like choosing guardians for minor children and picking an executor to handle your estate. But keep in mind that your will’s reach doesn’t extend to joint property, retirement accounts, and trust holdings.
Modern estate planning must tackle digital assets that need special attention beyond standard will provisions. Your legacy and loved ones stay protected through basic wills or complex arrangements with revocable and irrevocable trusts.
At Fuchs Financial, our advisors can help you begin planning your estate today! Contact us here.
FAQs
A will is a legal document that outlines how you want your assets distributed after your death. It allows you to specify beneficiaries, name guardians for minor children, and appoint an executor to manage your estate.
No, a will doesn’t cover everything. Jointly owned property, assets with designated beneficiaries (like retirement accounts and life insurance), and property held in trusts are typically not controlled by a will.
If you die without a will, you die “intestate.” This means your assets will be distributed according to state laws, which may not align with your wishes. The probate process can also become more complicated and expensive for your loved ones.
It’s advisable to review and update your will after major life events such as marriage, divorce, birth of children, or significant changes in your financial situation. Regular reviews every few years are also recommended to ensure it still reflects your current wishes.
While having a will is generally beneficial, it does require your estate to go through the probate process, which can be time-consuming and costly. Additionally, wills become public record after death, which may be a privacy concern for some individuals.
