For a lot of people, the idea of putting a Will or Estate Plan together is incredibly distressing. It can be very difficult to face the truth about our future, so we tend to procrastinate and push creating our Will to “later”. A “later” which may never come. So, what’s really holding people back from finally finishing their will?
Reasons people procrastinate preparing their will
People feel they don’t need a will
Some people think a will is not necessary. Maybe they are single, have very few current assets, and don’t have kids. All of life’s situations, however, are temporary. In a few years your estate value will climb, and you may have a spouse or children. Regardless, a Will is a final statement about what you feel is important. This is your opportunity to specify what people and causes get your money and propoerty. It is a final chance to tell the world how much you value your church, a pet shelter, saving the environment, or anything else.
They feel they don’t have much to give away
It is common thinking that only the rich need a Will. Even if you don’t feel you have many financial assets today, most people have possessions they wish left to certain people. Maybe your home, your family’s jewelry, or your retirement accounts. In fact, if you don’t specify who will care for your children when you’re gone, the courts will have to decide. Wouldn’t you rather be the one to make this decision? Without a Will, you have no control over where the things you leave behind go. So, it is important that you plan ahead.
People don’t want to discuss their private details with anyone
One of the situations that hinders us from creating a will is our fear of exposing our vulnerabilities to someone else. Talking about our mortality, medical issues, or our finances can be difficult. Sometimes they think they will need to discuss intimate thoughts and feelings with a stranger as they prepare their Will. For this very reason, most professionals involved in creating a Will do not even ask you to discuss reasons for your decisions. The great thing about this gift is that you have total control over it. It is your Will, after all. Most people suggest meeting with a few estate professionals to determine which one you best fit with. This will minimize the probability of anxiety and increase your feeling of security.
They don’t feel ready
Well the truth of the matter is — no one wants to think about death when they’re perfectly healthy. Many people think that when you are well, you can put off writing a Will. A Will isn’t a sign that you are beginning the end at all. Writing it early allows you change it as you meet more people, love new ones, etc. Realistically, it is a document that changes as your life changes to reflect your new priorities. Trying to figure out if you need a Will or not doesn’t really do you any good. The sooner you get the document started, the less stressing it will be for you. Writing a Will can certainly be daunting. Your Will deals with difficult end-of-life decisions but it is something that we all need to think about and plan while we still can. Remember that “A man’s biggest mistake is to think that he has time. ” Realizing this helps us value every second that passes.
Reasons you MUST have a Will
Since we have already discussed the reasons why many people don’t have a Will, let’s delve into discussing why you MUST create one. While each situation is unique, here are a 7 reasons why you should crease a Will with a gift planning counselor or professional.
There are only 3 places your money will go
There are only 3 places your money will go when you die.
- Your loved ones
- The causes you care about
- The government.
Without careful planning, most of your money will go to the government through a process called probate. However, with careful planning, you can ensure that most of your money goes to the people and causes you care about and minimize the amount that goes to the government. Have you ever met someone who wanted to give extra money to the government during their lives?Why do people give more than needed after their death?
Reduce family tension
We have all heard sad stories of families fighting over the estate of a deceased loved one. This often happens because the one who passed was not clear in their desires for how the estate should be divided. Having a Will lessens the likelihood of conflict among the people you leave behind because you specify what should happen with your assets. In the case that greed overrules wisdom among those left behind, a carefully drafted Will can include special provisions to help prevent hostile family members from challenging the document. Your Will may also include specific instructions for dividing up complex assets among your beneficiaries. Your attorney can help find ways to prevent or reduce any potential problems.
Decide who should handle your estate
Settling an estate should be left to someone who is honest and well organized. The Executor of the Estate must manage a complex list of tasks that includes reporting estate assets, paying creditors, filing tax returns, and making distributions. Without a Will to guide them, the courts will be forced to select an Executor on your behalf. The person chosen might not have your best interests at heart. In fact, it may even be one of your creditors. Part of the peace of mind that comes from having a Will prepared is knowing that your estate will be settled by someone you trust.
Plan for your loved ones
A Will allows you to decide about the welfare of your children when you can no longer make these choices. Without a Will, you leave your children’s future to the court. As hard as they try, courts will never know or understand all the dynamics in your family. They are less qualified than you to decide who is best to care for your children and others you love.
If you have young children, choosing guardians to care for them in case both parents are gone can be a challenge. Those you choose should, of course, be responsible and love your children. But you should also consider other factors such as the candidates’ parenting philosophy, religious beliefs, and whether they live near other relatives and good schools. Once you have settled on who your guardians will be, naming them should be among your Will’s essential provisions.
Give your biggest gift
By preparing a Will, you will be enabled to leave the biggest gifts you will ever give. It will help you leave your legacy and personal values behind. Your Will can include Gifts to Charity which may help minimize estate taxes. Currently, estates valued at more than $5. 49 million are subject to the federal estate tax, with a tax rate of up to 40 percent. Gifts to Charity can help reduce, and in some cases eliminate, taxes on your estate. These tax exclusions can help increase the value of your estate for your loved ones and other heirs to enjoy.
Your will may be out of date
A Will is not a static document. It needs to be revised from time to time to reflect changes in your circumstances. In general, a Will should be reviewed every three to five years to ensure that it still reflects your wishes. A few specific reasons a Will may need to be revised include the following:• You have gotten married or divorced
- You have new children
- Someone named in your Will has died
- Your assets have increased or decreased significantly
- You have bought or sold real estate
- You decide to change who will receive a bequest from your estate.
Create trusts for minors and children with special needs
Some people simply shouldn’t receive an inheritance outright. Young people might not be mature enough to manage even a modest inheritance. Someone on government assistance may have his/her benefits taken away with a sudden influx of money. By including one or more trusts in your Will, you can appoint someone, called the trustee, to manage these assets on the beneficiaries’ behalf. Trusts for children can even include incentives for completing college or allow for distributions to help the child start a small business, put a down payment on a house, or pay for a wedding.
Coordinate your will with other assets such as life insurance and retirement accounts
Estate planning doesn’t end with your Will. Assets that name a beneficiary, such as life insurance or retirement accounts, are beyond the reach of your Will and should be set up to work in harmony with it. Jointly held property, which belongs to the survivor when one owner dies, should also be considered. The consequences of missing this essential planning step can be heartbreaking. There are too many stories of couples who had Wills prepared but neglected to update their beneficiary designations. When one spouse dies, the survivor may be left with little if the life insurance goes to an ex-girlfriend and the 401(k) to the decedent’s parents. As part of preparing your Will, your advisors can help prevent problems like these and provide for the people you care about most.
Prepare your financial power of attorney and advanced medical directive
In addition to a Will and updated beneficiary designations, a complete estate plan usually includes a financial Power of Attorney and an Advance Medical Directive. These documents allow you to appoint someone to manage your finances and medical needs in case you ever become unable to do so yourself. Having this paperwork ready when the need arises will help eliminate the need for a court-appointed guardian and can prevent disagreements among family members at an already difficult time. For those making medical decisions on your behalf, leaving clear instructions will also provide them with the assurance that they are making the right choices for your care.
We hope that this has been beneficial. Too many people pass without having a Will in place and leave a mess behind for those who remain. Not having the money they need to live the life they deserve, squabbles over the estate that destroy families, and no planning so much of the estate goes to the government. These are just a few of the reasons to make sure you have a Will guide and care for your loved ones when you pass.