You may know how you want your assets and personal belongings to be handled upon your death, but if you haven't officially made these desires known, you can't assume that your loved ones know your wishes — and will honor them. Without a will and testament, also called a legal will, those wishes aren't legally binding.
What Is a Will?
A will is a written document stating a person's final wishes for their money, their property and people in their care. Though that's the general concept, legal wills must also be prepared according to specific rules.
A will may be a good way to secure your plans for your finances, family and property after you die. These plans could include the type of funeral or burial you want. Your will could also name who will inherit your favorite pieces of jewelry or who will raise your children. Without a will, the government automatically treats your next of kin as your heirs. Finally, a will could help minimize legal challenges that can arise if, for instance, a relative was mistakenly expecting to inherit money or a family heirloom. A properly written will could help save your survivors a good deal of trouble and confusion.
What Can a Will Include?
When drawing up a will, there are several main areas to consider:
Executor: The executor handles the estate after you die. The executor pays any remaining bills, files outstanding taxes, cancels credit cards, distributes property and assets in the will, and finishes any other remaining business. The executor can be a friend, a family member or even a bank. But it's best to ensure they agree to the role before designating them in your will.
Assets & belongings: A will can name the recipients of your real estate, bank account assets, cars, jewelry, sentimental items and certain other financial assets. Items can be specified as a whole category, such as "jewelry," or identified individually, such as "wedding ring."
Disinheritance: You can disinherit a person in your will. This person would be someone normally considered a legal inheritor, like a spouse, sibling, child or other family member. For example, a divorcee may choose to disinherit their former spouse. If you disinherit someone, they will not receive any of your assets or belongings.
Guardianship: A will can also designate a guardian or guardians for your minor child or children, and if possible, dedicate funds to raising them. If you die without specifying your child's guardian, the court will select a guardian or guardians, and they might not be the person or people you would have chosen. If you're a pet owner, you can also identify who will care for your pet. Again, it's important to ask permission before naming someone as a guardian of a child or a pet in your will.
Gifts & donations: In your will, you can specify money or items to be gifted or donated to friends, family and charities. Federal gift tax laws allow a certain amount to be given to a person without the estate owing a gift tax. Donating money can have tax ramifications, so it's best to consult an attorney or a tax advisor on this matter.
How to Write a Will
Since a will is a legal document, it's a good idea to seek help from an attorney to draft it. Once the will is written, it needs to be signed. You might need to sign it in the presence of witnesses, and they may also need to sign it. Often, these witnesses cannot be named as beneficiaries in the will. The attorney can help you obtain these signatures, and the signees do not need to see the contents of the will. Some states require that your signature be notarized as well.
Then the only thing left to do is to store your will in a safe but accessible place so that it can be found when needed. Some people leave it with their attorney, some put it in a safe-deposit box or home safe, and some keep it at home in a file cabinet. It's helpful if the executor or someone close to you knows its location.
A will is an important document to have, and it can be changed at any time. If you don't have this documentation in place, consider talking to your attorney for more information.