Preparing your last will and testament is unquestionably one of the most important aspects of careful estate planning. And it’s never too early to ensure that your financial and legal matters are under control.
While our team of professional and experienced estate planner can guide you through the process, it is vital that you familiarize yourself with the different options at your disposal. This quick guide will provide the insights that you need.
Why are Wills important?
Research shows that 67% of Americans (1)have no wills or estate plans in place. Whether you are approaching retirement age or you’re in your twenties, now is the time to call a team of estate planner to put things right.
By putting wills in place, individuals and families can see a range of benefits, including but not limited to;
- Ensure that all properties, monies, and assets are distributed to the intended beneficiaries.
- Prepare your estate planning documents to minimize the fees that beneficiaries will encounter.
- Gain peace of mind for the rest of your life. It also removes potential stress for loved ones after you pass.
Appreciating the importance of wills is one thing, but selecting the right type of document is another. Here are the four main types you may encounter in your estate planning endeavors.
1. Simple Wills
Simple wills are the type of will that most people are familiar with. Writing a simple will should not take up too much time. In fact, some people who only have very basic demands may take the DIY approach by using a template. However, using estate planner is still usually advised. If nothing else, it provides peace of mind by ensuring that the documents can be executed as wished.
When using simple wills, you can;
- Name your beneficiaries (2).
- Name a guardian for minors.
- Explain how your estate will be distributed.
- Confirm the executor of the will.
Ultimately, simple wills can be used to ensure that any financial commitments are settled following your death before distributing the remaining assets.
2. Testamentary Trust Wills
Testamentary trust wills are used to put assets from your estate in a trust. This can include monies while it is also possible to establish what happens to properties and other assets. In most cases, this type of will can be used to release assets on a gradual basis. For example, beneficiaries may gain a percentage now before receiving the rest when they retire.
This type of will is usually used in situations where you;
- Have minors who you don’t want to receive assets until they become adults.
- Have beneficiaries who won’t be responsible if they receive their inheritance at once.
- You want to help reduce inheritance tax in certain situations.
A testamentary trust will also enable you to place conditions on the inheritance of properties (3) or other assets.
3. Joint Wills
Joint wills are used to connect two or more people in the estate planning process. They are most commonly used by spouses, but could also be used by business partners and other close parties. Joint wills often ensure that the remaining spouse inherits everything following the other testator’s passing.
Before opening joint wills, though, you should know that;
- Joint wills include a separate will for each person.
- The terms, including beneficiaries, cannot be changed.
- Joint wills set the terms for when the first testator dies and when the second passes.
Joint wills can become complicated but remain a popular choice for many spouses. With the right estate planner, they can be very useful.
4. Living Wills
While all of the above wills are for when you pass, living wills determine what happens to your estate if you become incapacitated. It is very useful if you develop Alzheimer’s, get a life-threatening illness, or become unable to work. Living wills can coexist with other wills and take priority should circumstances dictate it.
Estate planner can help your prepare living wills that;
- Determine what medical services you want to pay for if incapacitated.
- Name a loved one to make decisions on your behalf.
- Set the advanced healthcare directives (if applicable).
Estate planning focuses largely on surviving loved ones. But you must not forget about yourself. For that reason, living wills can be a hugely valuable asset.
Family.Estate can match you with a qualified estate planner in your area who will help take the stress out of planning your will. Take our quiz today and promptly get matched with a estate planner.
Resources:
https://www.investopedia.com/terms/b/beneficiary.asp
https://www.propertyguides.com/usa/news/usa-inheritance-laws/
https://www.nia.nih.gov/health/advance-care-planning-health-care-directives
