What Are the Reasons New Parents Draft a Will?

Understanding the Basics of Wills

A Will is an estate planning tool and legal document that outlines your final wishes for your assets and dependents, safeguarding your child's future and ensuring assets are distributed per your desires. A will can include provisions for a trust, which can manage and protect assets for minor children until they reach a suitable age.

The document appoints someone to manage your estate, lists your assets and liabilities, and designates beneficiaries. Assets in a will can include a wide range of properties such as real estate, financial accounts, vehicles, personal belongings, family business interests, and intellectual property.

If you don't have a will, you may want to seek the expertise of an estate attorney who understands your circumstances and the laws in your state. Click here to learn more about the steps to create a will.

Appointing a Legal Guardian for Minors

As parents, a Will allows you to name a guardian for your minor children, ensuring they are cared for by a trusted individual if both of you were to pass away.

This appointment ensures that your child's guardian shares your values and preferences for upbringing so they will be cared for according to your wishes.

Legal guardians must provide for the minor's physical well-being, including housing, food, clothing, medical care, insurance, and education. Additionally, they are responsible for managing the minor's finances (if applicable) and making decisions in the minor's best interests, including medical decisions and financial decisions, while being accountable to the court.

Managing Estate Asset Distribution

Having addressed appointing a guardian for minors, it is equally important to focus on asset distribution to ensure your estate is allocated according to your wishes. A will plays a crucial role in managing asset distribution for several key reasons:

Creating Trusts for Minors or Special Needs

A will can establish trusts to manage assets for minors or special needs child, ensuring their financial care according to your wishes. Trusted individuals or entities will control the assets until beneficiaries reach the specified age.

Specifying Beneficiaries

A will allows you to identify who should receive your assets after your death, including family members, friends, charities, or any other entities you choose. 

You can also designate specific beneficiaries for financial accounts like bank accounts, retirement plans, and life insurance policies. Naming beneficiaries allows you to determine who will benefit from your estate, which is not guaranteed if your estate is distributed according to intestate succession laws (the default legal process when there is no will).

Detailing Asset Allocation

Beyond naming beneficiaries, a will lets you precisely describe how your assets should be divided. You can allocate specific accounts or set percentages of your estate to go to different people. This level of detail can help prevent misunderstandings and disputes among your heirs.

Providing for Conditional Gifts

You can include conditions in your will only to bequeath certain assets if specific requirements are met. For example, you might leave some of your estate to a grandchild, but only if they pursue higher education.

Minimizing Family Disputes

A will can help minimize potential disputes among family members by clearly outlining how you want your assets distributed. When your wishes are documented, there is less room for misunderstanding or contention over who gets what.

Facilitating a Smoother Probate Process

Having a will typically makes the probate process (the legal process of administering your estate) smoother and more straightforward. The court will have clear instructions on distributing your assets, which can expedite the process and reduce legal costs. Keep in mind that estate laws differ by state.

Flexibility in Asset Distribution

Wills can be updated as your circumstances change, which means you can alter the distribution of your assets if your financial situation, relationships, or preferences change over time.

Managing Business Interests

Having a will as a business owner can be crucial as it can designate a specific heir to take over the business or outline instructions for selling or managing your share.

Addressing Debts and Taxes

A will can provide vital instructions for how debts, including taxes, should be settled to ensure that your estate is distributed to your beneficiaries as intended after all obligations are resolved.

Minimizing Legal Complications

Drafting a will is a critical step in estate planning that can significantly minimize legal complications for several reasons:

• Clear Distribution of Assets: A will provides specific instructions on how assets should be distributed after your death. This clarity can prevent disputes among heirs and beneficiaries, as the will outlines your exact wishes.
• Appointment of Executors and Guardians: In a will, you can appoint an executor who will manage and distribute your assets according to your wishes. For parents, designating a guardian for minor children is crucial. This pre-emptive decision avoids potential legal battles over guardianship should the parents pass away unexpectedly.
• Avoiding Intestacy Laws: Without a will, your estate is distributed according to state intestacy laws, which might not align with your personal wishes. A will ensures that the estate is handled as you desire, not as the state decides.
• Reduces Probate Challenges: While a will still goes through probate (the legal process of validating a will), having one typically makes the process smoother. A clear, legally valid will can expedite the probate process and reduce the likelihood of legal challenges.
• Minimizing Estate Taxes: A well-planned will can also help reduce the burden of estate taxes on the beneficiaries. Strategic distribution of assets and use of trusts can be effective ways to minimize tax liabilities.
• Addressing Debt and Taxes: A will can also provide instructions on how debts, expenses, and taxes should be paid, which is essential for preventing financial disputes among your surviving family members.
• Clarifying Final Wishes: Beyond assets, a will can also outline other important wishes, such as funeral arrangements and charitable donations. This helps to avoid misunderstandings and ensures that your wishes are respected.
• Preventing Family Disputes: A will that clearly states your wishes can prevent potential family disputes over asset distribution, especially in families with complex dynamics or significant assets.

You might consider naming alternate guardians and trustees in case your initial selections are unable to fulfill the role or are no longer alive when needed. 

It is always advisable to consult with an experienced Estate Planning Lawyer and Estate Tax Professional to ensure your will is legally sound, enforceable, and tailored to your specific circumstances and wishes.

Leaving a Lasting Legacy to Help Secure Your Child's Future

A will is not just a legal document but an expression of love and commitment to your children's well-being, ensuring that your legacy benefits them long after you're gone. It is an instrumental tool for several compelling reasons:

Asset Protection for Children

By specifying in your will how your assets should be distributed, you ensure that your children receive the inheritance you intend for them, including money, property, family heirlooms, and other valuable assets that contribute to their financial stability and future prosperity.

Appointment of Guardians

For parents with minor children, a will is crucial for appointing a guardian. This decision ensures that, in the event of your untimely death, your children will be cared for by someone you trust, aligning with your values and parenting style, thus providing them with stability and continuity in their upbringing.

Creating Trusts for Children

A will allows you to form trusts to manage children's inheritance until they are capable, ensuring assets are used for specific purposes and protected from potential misuse.

Educational and Life Opportunities

By allocating funds specifically for education or other life-enhancing opportunities, you can ensure that your children can access resources that contribute to their personal and professional development, even in your absence.

Minimizing Financial Burdens

A well-planned will can help reduce the tax impact on your child's inheritance. Through strategic planning, you can ensure that a more significant portion of your estate goes directly to your children rather than being eroded by taxes or legal expenses.

Ensuring Continuity and Security

Ultimately, a will provides continuity and security for your children. It assures them that their needs and future have been thoughtfully considered and cared for, which can deliver comfort and stability during a challenging time.

Conclusion

Creating a will is crucial for parents to protect their children's well-being and ensure their assets are distributed as intended. It provides legal clarity for the appointment of guardians for minors, mitigates potential legal disputes, and facilitates a smooth estate transition.

Creating a will is a powerful step towards a secure future for your loved ones. Don't leave their well-being to chance—take control by documenting your wishes. Click to get started with your free will now!¹

Sources

1. Free Will from Fabric by Gerber Life, a member of the Western & Southern Financial Group Family of Companies. https://www.westernsouthern.com/about/family-of-companies.