Part of growing up is understanding how vital specific preparations are. An estate plan is something that is considered to be integral and you should have those documents prepared as you age. When you accumulate possessions and assets as an adult, you should want to pass them on to the people you want to get them. A will is one instrument that is used to distribute money and property to your heirs. Find out more about some of the things you can and cannot address in your will.
Creating an Effective Will
A will is a document that legally memorializes your desires about how you want your financial accounts distributed and who should care for your children (if you have children). To create an effective will, you should always have people witness your signature. These witnesses should not be named in the will but can be relatives. You can distribute copies of the will to anyone you wish, including heirs.
Items Addressed in a Will
Personal property, such as jewelry and art, is something that is often addressed in a will. You should consider who you want to inherit family heirlooms and those belongings that are most meaningful to you. You can then choose how to divide your wealth. If you are unmarried, this is especially crucial as not having a will or dying intestate, means the court system will get to decide where your property and money go. In your will, you can also name who will be the guardian over any children who are still minors at the time of your death.
Things a Will Cannot Do
A will is not the end-all, be-all document to take care of your estate. There are other ways an estate planning lawyer may suggest you leave money to heirs, such as through the establishment of trusts. You cannot start or change the trustee of a trust in a will. If you have any other accounts that require a beneficiary designation, such as a 401(k) or life insurance policy, you cannot name differed beneficiaries in your will. The money you have set aside in those fiduciary tools will remain there and be distributed according to the guidelines you established. Other things you cannot use a will to fulfill include:
- Designate a guardian for an adult child with special needs
- Give your pets money
- Get out of probate
- Avoid estate taxes