Facing the inevitability of death can be daunting. However, preparing for it with a well-drafted will ensures that your wishes are respected, and your loved ones are taken care of. This guide will walk you through all the essentials of wills, their importance and steps to create one.
So, let’s dive in!
What is a Will?
A will is a legal document that outlines how to handle the person’s assets and matters after their death. It specifies who will inherit property, take care of minor children, and manage other responsibilities. The person creating the will is the testator and those receiving assets are beneficiaries.
Importance
- It ensures that your assets’ distribution is according to your wishes. Without a will, state laws determine the distribution of your estate.
- A clear, legally binding will prevent disputes among family members and maintain harmony.
- A will allow you to appoint a guardian to care for your minor children.
How to Create a Will
Creating a will involves several key steps. Here’s a comprehensive guide to help you through the process.
Decision on Key Elements
- List all your assets. This includes your property, bank accounts, investments, and personal belongings. Decide who will inherit what.
- If you have minor children, choose a guardian for them.
- Appoint an executor responsible for managing your estate.
- Specify how your debts and taxes would be paid from your estate.
- Decide if you want to leave any part of your estate to charity.
Drafting the Will
- Start with an introductory statement declaring the intent to make a will. Also, include a statement declaring that you are of sound mind and not under duress.
- Clearly state the name and contact details of the person you appoint as executor.
- Detail your beneficiaries and the specific assets they will receive. Be as specific as possible.
- Clearly mention guardian(s) for your minor children, if applicable.
- Outline how your debts, expenses, and taxes will be paid.
- Include any other wishes like funeral arrangements.
- Sign and date your will in the presence of witnesses.
Authenticating the Will
- Most states require at least two witnesses who are not beneficiaries. They must see you sign the will and then sign it themselves.
- Notarizing your will can add an extra layer of legal protection. Although it is always required.
- A self-proving affidavit simplifies the probate process by validating the authenticity of the will.
Safely Storing the Will
- Keep your original will in a safe place. This includes a fireproof safe or a secure file. Inform your executor and loved one about its place.
- Give copies to your executor.
- Keep a copy with your attorney.
Additional tips
- To ensure that your will complies with state laws, consult a legal professional.
- Review and update your will after major life changes.
- Use clear, precise language to avoid any ambiguity.
Types of Wills
When planning your estate, it’s important to understand the different types of wills available and how each one serves different needs. Here, I’ll give you an overview of simple wills, living wills, and testamentary trusts to help you determine which is best suited for your situation.
Let’s take a look!
Simple Will
A simple will outlines how you want your assets to be distributed after your demise. It also features guardianship for your minor children and an executor to manage your estate. Moreover, it can be easily updated as your circumstances change.
However, it may not address complex financial situations or provide tax benefits. Also, it must go through probate, which can be time-consuming and costly.
It is best suited for individuals with straightforward estates, limited assets, and uncomplicated family situations.
Living Will
A living will is also known as an advance directive. It outlines your wishes regarding medical treatment and end-of-life care in case of your incapacitation and inability to communicate your decisions. It also appoints a healthcare proxy or durable power of attorney for healthcare. That person can make medical decisions on your behalf. However, living will only address medical and end-of-life care, not asset distribution.
This type of wills is best suited for individuals who want to relieve their loved ones of the burden of making difficult medical decisions.
Testamentary Trusts
A testamentary trust is a trust created within a will that comes into effect upon the death of the testator. It features the name of a trustee to manage the trust assets and allows for conditional or staged distribution of assets. Moreover, it can protect beneficiaries who are young, have focused needs or are financially inexperienced.
It provides greater control over how and when assets are distributed. It can also protect assets from creditors or irresponsible spending by beneficiaries. However, it is more complex and potentially more expensive to create and administer. It also requires ongoing management by the trustee.
It is best suited for individuals with significant assets or complex family situations. Also, it is beneficial for those who want to protect their assets from creditors or ensure responsible management.
What Happens if You Die Without a Will
Dying without a will is known as intestate. This means that state intestacy laws will decide the distribution of your estate. These laws determine who inherits your property and in what proportions.
Eligibility for Inheritance
Following is the hierarchy of relatives to inherit the estate:
Spouse and Children
- If you are married with children, the estate is divided among them. The spouse receives a specific amount first. The remainder is split between the spouse and children.
- If you are married but have no children, the entire estate goes to the spouse.
Unmarried
- If you are single, your estate goes to your parents.
- If your parents are not alive, the estate goes to your siblings.
- If you have no siblings, the estate may go to your relatives. This includes nieces, nephews, grandparents etc.
No Relatives
- If there is no eligible relative, the estate goes to the state.
Suggested Read: What is Death Tax Australia? [Complete Guide]
Administration of the Estate
When a person dies intestate, the court appoints an administrator to manage the estate. An administrator is usually a close relative. This includes a spouse, child, or a parent. However, if no relative is available, the court may appoint a public trustee. The following are the administrator’s responsibilities:
- Collecting and valuing the assets.
- Paying any outstanding debts and taxes.
- Distributing the remaining assets according to the law.
Implications
If you die without a will, the following could be potential complications:
- It can lead to delays in the administration process and increased legal costs.
- Intestacy laws may result in distribution of assets to relatives you would not have chosen as beneficiaries.
- The distribution may lead to disputes among surviving family members.
- Without a will, the court decides the guardian for your young ones which may not align with your preferences.
Bottomline
To ensure your peace of mind and avoid complications, draft a comprehensive will today. Consult with a legal professional to make sure your will is clear, legally binding, and aligned to your preferences.
Start planning now and protect your legacy.
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