Once you reach adulthood, your responsibilities grow exponentially, as does the complexity of your financial life. From buying a home to owning a car or even saving for retirement, you undoubtedly have assets and liabilities of some sort. To steward those in an efficient way in the event of your untimely and unexpected passing, a will can take care of everything you leave behind in a fulfilling way.
No matter how old you are or what your financial situation may be, creating a formal will ensures you leave behind a legacy for your family or friends, rather than a bureaucratic headache. Find out what could happen if you don’t make a will and what you can accomplish when you do opt to create one.
What Happens Without a Will
If you pass away without a will, the state takes over the disbursement of your assets, including your bank accounts and personal property. Each state varies on how this process unfolds. The details also depend on your surviving heirs. If you’re single, your assets would likely go to your parents or siblings.
If you’re married, your spouse (or domestic partner) will receive ownership of your assets. If you’re not married but living together, things can get tricky without a will. In this situation, it would be unlikely for your surviving partner to inherit anything. This can lead to a sticky scenario if you informally shared finances.
3 Things Included in a Will
Creating a will can be as basic or complicated as you’d like. At a minimum, here are the most common things you’ll likely need to include to cover all your bases in a legal situation.
1. Appointment of an Executor
The first part involves appointing an executor. Choosing the right person is important because they’ll be executing your wishes rather than someone appointed from the state. Depending on where you live, this role may also be called a personal representative.
Pick someone you trust because they’ll see all the details of your finances while simultaneously managing family relationships during the distribution process. Also note that your executor should be in close proximity to where you live because they’ll need to carry out many of their responsibilities in person, like filing paperwork at the courthouse of your jurisdiction. They’re also responsible for filing any owed taxes.
2. Distribution of Property and Assets
This is the part where you designate the beneficiaries of your property and assets. It’s important to be as detailed as possible. If you’re not, you leave too much room for interpretation that could potentially cause disagreements among your surviving heirs.
When appropriate, discuss things ahead of time if you have multiple people to whom you’d like to leave an inheritance. While it’s easy to evenly divide financial assets, it’s harder to do so with physical property, especially for sentimental or heirloom pieces. You can designate who receives what, or that property should be liquidated, with the proceeds being split among certain beneficiaries.
Whether you write a will using software or an experienced lawyer, you’ll leave a much more peaceful situation for everyone if you clearly spell out your intentions.
3. Guardianship for Minor Children
If you still have minor children from home, it’s important to name a guardian for them. While you don’t have to notify your chosen person (or people) in advance, doing so can be helpful to make sure it’s something they can handle both personally and financially.
Since everyone’s situation can change, from illness to divorce or anything else, you can even name several options for the guardianship role in the order of your preference. You’ll name your children (or other dependents) in your will, and you can also include language that ensures your decisions apply to any future children as well, so you don’t have to remember to update your will with every future birth.
In the event you don’t name a guardian for your child, the court will be tasked with choosing one for you. This will usually go to a close friend or relative, but it’s best to give yourself the final say in what happens to your children if you’re suddenly gone.
Get Your Financial Footing Solid Now
Another important piece of preparing for the unexpected is leaving your finances intact. This makes it easier for your heirs to sort through things and hopefully have something to help them in the future.
The first step of financial success is making sure your credit is as strong as possible. For professional help, reach out to Ovation Credit for a free consultation.