The Importance of Having a Will
by Christina Chong, CPA and Cindy Lott, CPA
According to a 2017 survey by Caring.com, more than half of American adults don’t have a will. A will is critical for managing your assets and protecting your family. But yet, 6 out of 10 Americans do not have one and are unprepared for the inevitable.
Whatever excuse may be used for putting it off, actually having a will drafted will give you comfort in knowing that your assets will be distributed and managed according to your wishes. A will is the most basic estate planning device, and everyone should have one. Even if you prepare a thorough estate plan and arrange to avoid probate through a living trust, you still need a will.
Some reasons for having a will are as follows:
•To leave property generally best left by will. Some types of property are not suitable to leave by a living trust. The most common example is your car. Also, you can name who you want to receive your personal belongings like jewelry, art, and other items of value.
•To appoint a personal guardian to raise your minor children. You can’t use any other device for this purpose. This is imperative if you have minor children. Otherwise, the state will decide who will get custody of your children.
•To name your executor, who will be responsible for the settlement of your estate. You alone can make the best decision on who will carry out your wishes the way you want. Your executor should be the person you trust the most. It is important to discuss your intentions with your “potential” executor, to ensure that he/she is agreeable to assume that role when the time arrives.
•To dispose of property not accounted for when you originally drafted your will. For example, you may end up acquiring property at or shortly before death, in the form of a gift or inheritance. If you have a will, that property will go to your residuary beneficiary. A residuary beneficiary is someone you have named in your will to receive everything that isn’t left to some specific beneficiary.
•To dispose of any property that was acquired and not transferred to your living trust. This helps with property that you’ve purchased that’s not in your trust because you didn’t properly complete transfers of title. Having a will ensures the property will go to whomever you want to have it (your residuary beneficiary) and not pass under state law.
•To indicate what sources will be used to pay any debts that are due and any estate taxes.
The importance of a will cannot be overstated. It is the most important legal document that most people will ever sign. Don’t think of drafting a will as the “end,” or relinquishing all of your assets. Think of it as leaving a lasting legacy to your loved ones.