You’re young and just starting your family – so you don’t have to worry about a will, right?
The truth is, having a will is important no matter your age and especially important if you have children. Not having one makes things messy and complicated.
Creating a will isn’t a long or complicated process and can make the difference should the inevitable happen and you pass away.
Contacting a lawyer is your best bet for creating a will but let’s look at the steps you should take when doing so. Also, we’ll look at the consequences of not having a will (sometimes they’re not pretty).
What is a Will?
Simply put, a will is a legal document that allows you to stipulate who takes over your estate and who gets your money and property after you die. It also allows you to designate guardians to minor children.
By law, your wishes have to be stated in writing and can’t be merely told to someone else. To ensure that no one attempts to contest your wishes, it’s best to have your will prepared and notarized by a legal professional.
You should seriously consider having a will because you can be clear about who receives your assets and how much they receive. This way, you can ensure that your children and spouse are taken care of.
Plus, with a will, your children and spouse will receive your property quickly than if they have to apply to the courts for the right to inherit your estate (more on that when we discuss what happens if you die without a will).
Wills are not just for wealthy people with tons of money. Every family, no matter their income or assets, should have a will.
What Kind of Will is Best?
With modern technology ever-evolving, people are opting for things like holographic wills. However, many areas will not recognize these or other types of wills such as oral wills. We’re just not there yet.
So the best kind of will is one that is written and witnessed – also known as a testamentary will. This is the most common type of will and will increase the likelihood of your wishes being carried out. This type of will is hard to contest should a family member challenge your stipulations.
You can write one yourself or, as mentioned above, have one prepared by a lawyer. Wills that are professionally prepared tend to be worded precisely and correctly.
What Does a Will Cover?
A will covers all of your belongs such as your bank balances, property, and valued possessions – and how they should be distributed.
However, payouts from your life insurance policy are not covered in your will. These policies already have specified beneficiaries who will receive the proceeds.
Apart from property and money, it’s important to specify who will take care of your children as their guardian should something happen to both parents.
What is the Difference Between a Will and a Trust?
When it comes to wills, you’ve probably heard the term “trust” thrown around as well.
Trusts are typically a legal way of putting conditions on how your assets are distributed after your death – more specifically when it comes to life insurance policies or pieces of property.
Trust can also be set up to provide for your underage children once they reach adulthood or a certain age. You can set the conditions that have to be met before they can access the money.
So while you can have a trust without a will, and vice-versa, it’s always helpful to have them created together to better protect your family as well as your wishes.
What Happens If I Don’t Have a Will?
Dying without a will is known as dying “intestate” which means that the state or province oversees the distribution of your assets.
This is where things can get tricky. If you die without a will, there is a legal process that decides who receives your estate based on a hierarchy of relationships.
Here is the list of circumstances and how your estate will be divided without a will:
- Spouse and No Children: Your spouse will inherit everything as long as they are your legally married spouse. If your partner is common-law, they do not automatically receive everything.
- Spouse and Children: Your spouse will take up to a certain dollar amount of your assets (this can vary from location to location) and anything left over is divided between your spouse and your children.
- No Spouse and Children: Your children will each inherit an equal portion of your estate.
- No Spouse and No Children: Your parents will inherit your estate. If they are deceased, it would be your siblings followed by nieces and nephews.
If you have no living next of kin, the government takes control of your estate for a determined amount of time to allow for an heir to show up. If no one does, the government then owns your assets.
This is just a basic overview of how it works. Things can become complicated when you take into consideration separated couples who are still legally married (not divorced), common-law partners, step-children, and children from previous relationships.
As much as you may not want to think about having your will written at this stage of your life, hopefully, now you see how much it is worth it.
How Do I Create a Will?
Glad you asked!
To prepare a will, start by listing your assets and your debts. Include any assets, such as heirlooms or valuables, that you want to give to a particular person upon your death.
You will also have to consider who is going to be the executor of your will. This is the person who will oversee your estate and your wishes, ensuring everything goes where it’s supposed to.
Your executor will also be responsible for ensuring that any taxes or debts are paid from your estate before the rest is divided among your beneficiaries.
Next, you need to prepare and validate your will. Again, you can do this yourself or have it done by a law professional (which is recommended).
Once the will is drafted, you need to have it witnessed by two adults (of sound mind) who know you but are not a beneficiary in your will. You should also have the will notarized to ensure that the document is legal.
After your will is complete, keep it in a VERY safe place. Probate courts usually require access to your original copy so it’s important to keep it safe and somewhere where your family can find it – especially your executor.
Can I Change My Will?
As you and your family continue to grow, it’s important to update your will as needed. Some people never update their wills but should your marital status change, or you add more bundles of joy to your family, it’s important to ensure it is accurate and up-to-date.
In the end, the only version of your will that matters is the most current one.
Review your will every 2-3 years and simply write a new one if necessary. If you simply want to add to your existing will, you can make amendments known as a codicil where two witnesses will attest to the changes you are making.
No matter how young you are or where you are in your life, please don’t put off making a will. You can’t predict the future, but you can ensure that your dying wishes are followed.