Wills and Estates: Protecting Your Estate
Wills and estates are extremely useful to individuals who want to direct their property, money and other assets to designated individuals on their death.
Many of us understand that we should have a will, but not all of us do what is necessary to ensure our estate is fully protected on our death. Our last will and testament is typically the first part of a comprehensive estate plan and is often used in conjunction with other estate planning tools.
What is an Estate?
An estate is the total net worth of a person. Items included in your estate can be bank accounts, a home (real estate), your car, and any smaller assets you own.
What is a Will?
A will is a legal document that allows you to achieve several goals. First, it allows you to bequeath belongings, property and cash. Second, it settles any debts owed to others. Third, a will allows you to name a legal guardian for your minor children.
Why is a Will Important?
A will is the most effective way to control the distribution of your assets upon your death. If you die without a will, your estate is taken over by the state and by a court-appointed state administrator who determines how and to whom your money and property are to be distributed.
Many people make a will because they want to ensure that their estates are divided according to their wishes. They may choose to draft a will so their assets are divided equally or even unequally among their children. They may also choose to leave their assets to a favorite charity. Also, an individual may draft a will to purposely exclude a family member from receiving any assets.
In short, a will allows an individual upon their death to control the distribution of their estates.
Who Should use a Will?
Anyone who is of legal age (18) and who is of sound mind (this is often called “testamentary capacity”) can draft a will.
If you have assets, regardless of how small, you should make a will. Many young people don’t make a will, but if they have any property or any assets, it is a good idea that they make a will so they are assured their estate is divided properly upon their death.
In addition, parents of minor children should have a will, regardless of whether they have any assets. A will can be used to name a legal guardian for their children if they die before the children turn 18 years old.
When Can I Make a Will?
As long as you are at least 18 years old and of sound mind, you can make a will. However, many people wait until they are seriously ill to draft one. When it comes to wills and estates, it is always prudent to be prepared for the future.
How Can I Ensure My Wills and Estates are Valid?
Each state has criteria that you must meet for your will to be valid. This criteria is often called “requirements for due execution,” and it often includes a signature and two or three witnesses. Each state has its own further requirements for where and how you can sign your will. If you are unable to sign your own will due to physical limitations, but are of sound mind, you may appoint another individual to sign your will on your behalf. This is called a “proxy signature.”
What Information Should be Included in my Will?
You should include in your will obvious information like your full name, address, signature and your witnesses’ signatures. You should also list all your assets and to whom you want to bequeath these assets.
You must name an executor, the person who will settle your estate and distribute your assets upon your death.
Finally, if you have minor children, you should include in your will a clause that details a guardian for your children. Many individuals also name an alternate guardian in case the first guardian is unwilling or unable to care for your children at the time of your death.
What Property can I Designate in my Will?
You can leave in your will many items, including property like land, homes, cars, bank accounts, stocks, and personal belongings. The only thing you cannot give away is “non-probate property,” property that automatically passes onto your heirs without being included in your will. These can include life insurance policies, payable on death accounts, assets owned jointly with your spouse, to name a few.
You can name anyone as a beneficiary, including family members, friends, charities and the like. I have also seen cases where individuals left the proceeds from their estates to people they didn’t even know. In short, it is up to you to name in your will whomever you want to receive the proceeds of your estate.
Wills and estates are a critical part of planning for your future, ensuring that your entire estate is protected and given to the right parties upon your death.