It seems that everyone knows that they need to have a will, yet many do not have one. According to LexisNexis, approximately 55% of American adults do not have a will. There are many excuses for why someone does not have a will: not wanting to face one’s eventual demise; being intimidated by the process; concerns about the costs; avoiding difficult decisions; or, simply “not getting around to it”. This post is designed to provide some basic information about what a will does and why it is important to have one.
What is the purpose of a will?
Fundamentally, a will is a written direction of how you want your assets to be administered following your death and a designation of the person or persons that you want to be in control of that process. If you have a child, a will can also be used to name your preference for a guardian.
Without a will, your assets will be administered in accordance with applicable laws regardless of your wishes or what otherwise might make sense for your family.
What does a will control?
A will controls assets that you own in your individual name at the time of your death. These assets may include personal property (cars, furniture, jewelry, artwork, etc.), real property (your home) and other property (bank accounts, stocks, bonds, etc.).
What is not controlled by a will?
Certain types of assets are not controlled by a will. For example, a will does not control assets that are jointly owned with another person (including, assets owned as joint tenants with rights of survivorship and assets owned as tenants by the entireties), retirement accounts, life insurance proceeds, and certain other assets that transfer in accordance with law or beneficiary designations at the time of death.
What is the process for making an estate plan and will?
The process for developing an estate plan and preparing a will typically starts with a conference with an estate planning attorney. During that conference, the attorney will ask questions to get an understanding of your family/beneficiaries, your assets and your desires for how your assets should be administered upon your death. With this information, the attorney will prepare a will that is tailored to your exact needs. At this point, you should take the time to read the draft and ask the attorney any questions that you may have. If you have any changes, the attorney should make those changes and give you another opportunity to review the will. Once the will has been finalized, it will need to be formally executed in accordance with specific legal requirements.
In addition to the will, the attorney may suggest other documents that are commonly executed at the same time. Those other documents include living wills (detailing circumstances when your life should not be artificially prolonged), health care surrogate designations (giving someone the right to make medical decisions for you when you are incapacitated) and durable powers of attorney (giving someone you trust the authority to act on your behalf when you are unable). These common ancillary estate planning documents will be the topic of another post on this site.
Why create a will now?
I started this post with a list of common excuses for why people do not have an estate plan in place. We all come up with excuses to avoid things that we do not want to do even when we know they need to be done. Unlike other things that we tend to put off, it is important to remember that it is your loved ones, not you, that will face additional difficulties following your death if you do not have a will in place. A will is the most fundamental of estate planning documents and virtually everyone should have one.