Writing a will is one of the basics of estate planning. It’s also something 40 percent of us avoid doing.
And on some level, we can understand that. Writing a will means acknowledging the end of our lives, and that’s something many of us aren’t comfortable pondering.
But we’d argue that the only thing worse than writing a will is not writing a will.
Ask anyone in the Bucks County family law field, and they’ll tell you dying without making your wishes clear can only lead to confusion and ill feelings among your survivors, and might result in your family failing to carry out your wishes.
With that in mind, here are a few things to think about as you write your will:
1. Think about who you’re leaving behind
Make a list of anyone who might have a stake in your estate: children, your spouse, siblings, grandchildren, etc.
2. Think about your assets
Figure out all your assets: real estate, possessions, the money you have in the bank, investment and retirement accounts, etc.
Once you’ve calculated the value of those assets, you can use that figure to determine the value of individual bequests, minus the cost of taxes, legal fees, and funeral costs.
Your will can specify whether your heirs receive their inheritance as a fixed sum of money – usually the simpler option – or as a percentage of the assets.
3. Think about who will carry out your wishes
When you write your will, you can designate different people to carry out your wishes. For example:
- You can appoint someone as executor, to administer the settlement of your estate
- You can name someone a guardian to look after any minor children in your care
- You can designate a trustee to manage your assets until they are distributed
If you became incapacitated before you died, you can give someone power of attorney, which allows them to manage your financial affairs.
4. Think about setting up a trust
While you want to leave money to your children, they might be too young to manage their finances. That’s where a trust can help.
You can appoint a trustee to manage that money on your children’s behalf until they come of age. You can also create a trust to help out charitable organizations, or provide for other beneficiaries.
5. Think about taxes
Depending on how much you’re leaving behind, your heirs may have to pay taxes on their inheritance, although estate tax limits are always changing.
Last year, the federal estate and gift tax exemption was $5.6 million, but the new tax bill passed by Congress in late 2017 doubled that exemption.
That means someone could leave their heirs up to $10 million and not worry about them paying taxes. The bill covers tax years 2018 through 2025.
6. Think about changing your will
You may never need to update your will, or you might find yourself changing it multiple times. The key thing to remember is that the only version of the will that matters in the eyes of the law is the one that’s the most current – and valid – when you die.
That’s why it might be a good idea to review your will when significant changes happen in your life: marriage, divorce, the birth of a child. One of your beneficiaries might die before you do. And once your kids grow up, they’ll likely no longer need a guardian.
So, just to be safe, think about sitting down with a Bucks County family law attorney to update your will every two to three years.
If you need help changing your will, or are just beginning to think about estate planning, the Bucks County family law practice of Penglase & Benson can help.
Our lawyers are adept at making sure you craft a will that protects your assets and provides for your loved ones and your interests after you’ve gone. Contact us today to schedule an appointment.