When you think of a will, you probably think of a wealthy person who wants to protect their assets or an elderly relative who’s nearing the end of their life.
If you’re young or don’t own much, a will might not be a high priority for you.
But a will is important for all stages of life. They are especially important when you acquire property, like buying a house, or your family changes.
What Is a Will?
A will is a legal document that outlines how you’d like your affairs to be handled after you die or if you become incapacitated.
Wills are a common part of an estate plan, but they aren’t just for divvying up your property after you die. If you have children and fall into a coma, for example, a will can make sure a trusted individual receives guardianship of your children.
When to write a will
While you might think you don’t need to make a will until you get older, it’s never too early to have one in place.
The best time to make a will is when you face a significant life event. Some significant life events include:
- Purchasing a home
- Moving out of state or out of the country
- Getting married or divorced
- Having a child
- Adding other family members, like grandchildren
- Receiving a significant health diagnosis
You may also want to make a will if you’re exposed to additional risks. This could include frequent business travel for work or engaging in adventure sports like skydiving.
Any adult can make a will once they reach legal age, regardless of how much property they own. In the United States, that’s 18 years old.
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Why Having a Will Is Important
If you don’t have a will, your estate will go through probate. During that process, the state you’re a resident of will decide how your debts are repaid and how assets are distributed to surviving family members.
Each state has its own laws regarding how assets and liabilities in an estate are handled. Typically your spouse and children will be prioritized as next of kin ahead of parents or siblings.
Depending on your family dynamics, you may wish to add other beneficiaries or change how much of your will is apportioned to specific family members. A will is essential for doing that.
You may also want to have a will in place if you intend to leave gifts behind. This could include a donation to a specific charity or funding a specific purchase for a loved one, such as a grandchild’s college education.
When you don’t have a will to guide the process, it can lead to disputes or pass costly legal fees onto your family. This can add stress during a time of grieving. A will can give you peace of mind that the individuals you want to benefit from your estate actually do.
While a will is an important document for managing an estate, it’s also important if you have dependents. If something happens and you can no longer care for your children, the state can step in and assign a new guardian.
Without prior knowledge of family dynamics, the court could appoint a family member who is unable to care for your children.
A will ensures you get a say in who will look after your children until they come of age.
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How To Make a Will
Making a will is a simple process that can save your loved ones money and heartache later on.
There are different types of wills you can choose from:
- Simple
- Handwritten
- Oral
- Mirror
Each state sets its own laws. Handwritten and oral wills, for example, are informal records of your desires and may be valid in one state but not another.
The type of will you create will likely depend on the nature of your assets and the complexity of your family relationships. A simple will is suitable for most people. However, if you’re married, you might want a mirror will that has similar provisions for each spouse.
You can create a will for yourself by downloading a free template online. Make sure the template adheres to your state’s laws. Probate will determine whether or not a will is authentic, so you’ll want to make sure you dot all your i’s and cross all your t’s.
Depending on the size of your estate or the complexity of your family, you may decide to work with an estate planning attorney. Some may charge a flat fee to create an entire estate plan — including a will — while others may charge an hourly rate.
An estate planning attorney can also advise you on the best way to structure your assets. This might include setting up a trust.
A trust can make it easier to transfer assets, like your investment portfolio, and can regulate how and when young children get access to an inheritance.
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TL;DR: Do I Need a Will?
While you might not think you need a will right now, it will save your loved ones money and heartache in the future. This is especially the case if you're at a major life stage like getting married, having a kid, or buying a home.
You can revisit and update your will as your life situation changes. The important thing is getting that initial document in place so you know your bases are covered.
For more tips on managing your money and preparing for the future, check out these episodes of the Erika Taught Me podcast:
- How To Set Your Kids Up Financially
- 10 Steps Towards Financial Wholeness
- Money & Investing Pitfalls to Avoid
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