Last Will and Testament
A will is a document which directs how a person's property is dealt with after their death. Also known as a “last will and testament,” it is one of the most important documents in estate planning. Unfortunately, it is also something that many people put off dealing with due to the sensitive subject matter.
Do You Need a Will?
Planning for what will happen after you pass away can be difficult for many people to face. However, it is important to consider what happens to your property without having an estate plan in place. Without a will, your property will be distributed according to state laws, without consideration for what you would have wanted for your friends, family and loved ones.
When someone dies without a will, they are considered to have died “intestate,” meaning their property will be distributed according to the state intestacy laws. This can get more complicated if you have property in multiple states, there are children from a previous marriage or relationship, or if the property is shared between multiple owners in family or business arrangements.
Depending on your surviving family members, your property may go to your children, spouse, grandchildren, or other relatives. If you die leaving behind children, but no spouse, then your children will inherit everything equally. If you have a spouse, and no children, or children only with your spouse, then your spouse will inherit everything. If you have a spouse as well as children with another person, your children and spouse will inherit half of your separate property, and your children will inherit half of the community property. Intestacy laws can get complicated very quickly.
Alternatively, if you die without family members, your property will go to the state. Even if you would have preferred the property go to a friend, church or other organization, without a will, the state intestacy laws control what happens to your money, land, home and other property.
Furthermore, not all property is distributed according to the state intestacy laws. For example, distribution of retirement benefits, such as a 401(k), life insurance proceeds, and property in a living trust may not go through intestate, and will pass to the named beneficiary.
An unplanned estate can also have the unfortunate effect of bringing out greed in some people. This all too often results in tension between family members, and they try and decide what the passing relative really wanted, and who they wanted to be their beneficiaries. A proper will and estate plan can save family relationships by making sure that distribution of property goes exactly according to the terms of the will.
Creating a Will
Creation of a will can be done in a relatively short amount of time, and is the simplest way to make sure your wishes are carried out after you pass away. Through the will, you can specify who you leave your property to, including family, friends, church, school, or other organization. You can specify who you would like to take care of your children, and even your pets. You will also be able to name the person who will carry out the terms expressed in the will.
There are a number of important terms to know when talking about a will. This includes: