You may not feel old enough or rich enough to need a will, but the fact is that certain kinds of planning are still crucial for everyone over the age of 18. “Estate planning” is the legal name for the plans you need to make. A Will is a part of that planning. You do need a Will, but you need more than a Will to protect yourself and your loved ones.
Do I Need a Will?
You likely have a few possessions that are of monetary or sentimental value. While things like your home, car, and financial accounts are crucial assets to consider, your collection of photos and your iTunes library also deserve proper attention.
There is no minimum asset value required to justify having a Will, especially since there are many low-cost options, including estate planning attorneys who will not overcharge you for a basic Will.
Tragedy can strike at any moment, so it is best to have your affairs in order. Your loved ones don’t need to face financial struggle and your lack of planning while grieving.
What Does a Will Do for Me?
Writing your Will is smart because it puts you in charge of the disposition of your assets. A Will allows you to do several things at once.
- Pick your executor: This is the person who values your estate and distributes your financial and sentimental items to your heirs. Without a will, the probate court judge chooses this person.
- Designate guardians for any minor children. Young parents need to name proper guardians to take care of their children if they are no longer around. Otherwise, the children could end up with the most irresponsible family member or, worse, a stranger.
- Name any individuals and charitable organizations as beneficiaries of your estate.
If you die without a Will, called “dying intestate,” the North Carolina intestate law governs who receives what part of your estate, who administers your estate, and who takes care of your children. You are not in the driver’s seat unless you write a Will.
If I Only Make a Will and Do Nothing Else
Upon your passing, your Will has to go through a lengthy legal process called “probate.” In this process, a probate court judge reviews your Will and determines its validity. If someone contests your Will, the probate court process can take even longer.
Probate can delay the giving of your assets to your loved ones. It can also come with a hefty price tag. The accompanying legal costs may put your family members in financial straits.
If your goal is to ensure that your heirs’ cash flow is uninterrupted after your death, it would be wise to think about a trust or a life insurance policy. With a trust or life insurance policy, your assets can pass to your heirs without going through the probate process.
You may also have other assets that will not go through probate court. Some assets are exempt from probate and pass to your heirs immediately upon your death. These types of investments include:
- A home with joint tenancy with right of survivorship
- IRAs or other retirement accounts
With these assets, you have already designated specific beneficiaries upon your death. The assets pass to them without the delay and cost of the probate process.
Your Will does not apply to these accounts because they already have a named beneficiary.
The named beneficiary of these non-probate assets is the beneficiary designation on file with that account. It is irrelevant if your Will names someone different as the beneficiary of the asset. The asset will go to the account’s designated beneficiary.
It is wise to review all of your beneficiary designations periodically, but certainly after life-altering events like marriage, the birth of a child, or divorce.
Estate Planning is Not Just a Will
A Will is only one tool in the estate planning toolbox. There are other ways to protect your assets, your future, and your family’s future during life and after death. A Will by itself cannot achieve all of these goals.
Another essential planning tool is a durable general power-of-attorney and a healthcare power-of-attorney. These documents state who will make decisions for you in case you become incapacitated. If you are in a coma from a car accident, someone will need to make your financial and healthcare decisions for you. Taking the reins of your life now prevents someone you don’t trust from making life and death decisions for you in this situation.
If your spouse is incapacitated, you could desire to make decisions for them. However, without a power-of-attorney, a parent or some other relative could gain this power instead. Costly legal battles for decision-making power happen in families when tragedy strikes.
If you prepare with the right estate planning documents, you won’t face these kinds of heart-wrenching battles and decisions. If you prepare, you can better protect yourself and your loved ones.
Just DO It
You are neither too young nor too poor to engage in estate planning! Just remember that a Will may be necessary, but it is not the only means to plan for your future. Keep on top of planning for your personal and financial assets in the chance that you die young. However, don’t forget to also arrange for yourself and your loved ones in case you need help while incapacitated.
With good planning, if you do pass away, your survivors will have another good thing to say about you at your memorial.
Find the Help You Need
Knowledgeable attorneys draw up the best and most durable legal documents. If you need guidance making a plan for yourself or your family, contact our estate planning attorneys at Hopler, Wilms, and Hanna for a free consultation.
Our estate planning attorneys specialize in legal estate planning documents that protect financial health. However, we also focus on protecting our clients’ health through power-of-attorney documents that specify who will care for you and your loved ones if the unexpected happens. Don’t take a chance with your future. Start making a plan today.