5 Tips When Making Your First Will
Five Tips That You Should Consider Before You Have Your First Last Will & Testament Made:
So let’s say it’s about that time - you’re not getting any younger, you’re accumulating some assets, you may have one or more children, and you know it’s time to address estate planning. You’re thinking “Geez, I don’t even have a will. I don’t want the government getting everything if I pass away.” By the way, if you don’t have a will, it’s unlikely that the government is going to get your entire estate, but the government will determine who does inherit from you.
So, it’s time to stop procrastinating and get your will done. Here are five tips that you should be aware of when making your first Will:
1. Bequest to Spouse:
If you’re married, you must decide how you want to leave your portion of the assets that the two of you have, to your spouse. Some people say, I’ll just leave everything to my spouse, which is easy to comprehend but then your surviving spouse can ultimately leave your estate to anyone they want. Or, you might say, I want to make MY portion of estate available for my surviving spouse’s needs, but when my surviving spouse later dies, I want what’s left of my estate to go to the people that I choose. And there are several variations on this. You might say something like, “If I die before my spouse, I want my assets to be available for my spouse’s needs, but if my surviving spouse remarries, I don’t want my surviving spouse to be able to use MY estate assets anymore.
2. Bequest to Kids:
If you are about to make your first Will, you might have kids who are minors, or you might have kids who are young adults (maybe their early 20’s). Or, you might not get around to making your first Will until you retire and your kids are mature adults.Either way, when making your Will (assuming you have children or other beneficiaries who are a generation younger), you’ll need to decide whether you want those children to inherit outright or in trust. If you leave your estate to your children outright, you’ll be telling yourself, “My kids are grown. I’ll let them have and control their inheritance in one big chunk after I pass away. They can do with it what they wish. If they blow it, that’s their problem - I’ll be dead so it won’t make any difference to me.” Or, you’ll decide something like, “I have kids that are young or I have kids that aren’t quite financially stable enough to be able to handle a lump sum inheritance. I think it would be best to leave their inheritance in a trust for them. I’ll appoint someone to be the trustee of that trust and I’ll set it up so that they will receive their inheritance over time - and there’s a variety of ways to do that.” Note also that even though your kids may be adults and super-mature and super-responsible, many parents leave their estate in trust for those mature children to increase the likelihood that your children will be able to keep all of their inheritance in the event they get divorced after inheriting from you.
3. Your Executor:
When making your Will, you get to name one or more executors or co-executors who will be in charge of settling your estate when you pass away. Your executor will not be able to select who inherits from you, but a judge will give your executor the authority - after you pass away - to pool your accounts, pay any of your debts, sell property of yours, so that the estate can be settled and disbursed to the heirs that are designated in your Will. And if you are about to make your first will, you may not be 80 years old (but it’s ok if you are), so you may live for several decades, and it’s a good idea to name alternate executors as well. Here’s a hint. Married people often name their spouse as their executor, and then if they have adult children, it’s typical that one or more of the adult children are designated in the Will as alternate executors.
Now before I get to important tips 4 and 5 let me get to this point before life gets in your way and you procrastinate your estate planning even further. I have an estate planning law firm that can provide estate planning legal services to just about anyone in the country. While I spent the first three decades of my career providing estate planning legal services to clients in Louisiana, our firm, AEPL has added co-counsel attorneys who are licensed to practice law in most states and those attorneys actively participate in the estate planning process. So whether you live in Louisiana, California, New York, Florida, or Washington, click the link in the description below to request a no-expense initial zoom meeting to discuss your particular situation. Now, back to tips 4 and 5.
4. Will vs. Living Trust:
Some people make their first Will and then later obtain information that makes them wish they would have created a living trust. You see, when you use a last will and testament to leave your estate to your heirs, you’ll simply leave all of your assets in your name. When you pass away with certain assets in your name (typically business interests, brokerage accounts, real estate, and even bank accounts in your name only), those assets will be frozen when you pass away, and your heirs must use your Will, hire lawyers, and go through a court and attorney-involved probate process to gain access to your estate assets - this takes time, lawyers, judges, and money. Many people who put their estate legal affairs in order create what’s called a revocable living trust, they transfer their assets to their trust during their lifetime. So when they pass away, there are no assets in an individual’s name that will be frozen. Assets in your trust do not have to go through the court and attorney-involved probate proceeding. The successor trustee that you designated in your trust can disburse trust assets to trust beneficiaries immediately without getting lawyers and judges involved. So, when making your first Will, make sure you understand this will vs trust concept so that you can make an informed decision.
5. Additional Estate Documents:
Very rarely should someone simply just create a will and be done with their estate planning. A will addresses what happens to your estate after you die - it has no effect during your lifetime. Another component of estate planning is addressing how your estate gets handled during your lifetime if you ever get to a point where you can’t sign your name or make other decisions for yourself. VIrtually every estate plan consists, at least, of power of attorney and healthcare legal documents so that you will be making it easy for the people you designate to be able to make financial and medical decisions for you during your incapacity without interference from the court system or from anyone else.
Conclusion:
So there you have my five tips you should know before making your first will. Make sure you like, comment, and subscribe, and we’ll see you next time.
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