Almost 60 percent of Americans don’t have a will. Younger people are less likely to have a will, with almost 80 percent of Millennials saying they don’t.
There are a variety of reasons people don’t make a will. There are just as many reasons you need one.
If you’ve ever asked, “Why have a will?”, it’s time to look at these five reasons to make one. They should convince you that yes, you do need a will.
1. Life Is Unpredictable
The answer to the question, “Do I need a will?” is always yes. Some people think wills are only for those who are wealthy. You might think you don’t need one until old age.
Life is unpredictable, so making a will is a good idea for anyone. No matter your age or income, a will is a basic personal finance document you should have in your portfolio.
Wills and estates provide for the divvying up of assets between heirs and assigns. They also give instruction about what should be done if you happen to pass away.
What funeral arrangements do you want? Where will the funds come from? A will answers these basic questions for those you leave behind.
2. Why Have a Will? Protect Your Loved Ones
When the famous soul singer Aretha Franklin died, she didn’t have a will. That meant her entire estate had to go through a process known as probate court.
This judicial process lets public officials examine any assets you have. It also goes on the public record.
You may not think you have much in the way of assets. After all, you’re not a famous musician. You may not own any property.
Even your bank account or a car is an asset, though, as are any possessions you have.
Without a will, it’s up to the courts to decide where these assets go. Leaving a last will and testament gives direction to this process. This can ensure your assets end up with the people you feel will benefit most from them.
A will doesn’t necessarily mean you’ll avoid probate court, but it does make the process less expensive. It can also speed up the process, so your heirs can receive their inheritance sooner.
This could be especially important if you have young children or a sibling you’re supporting. Probate court could tie up funds for months or years.
If you pass away without a will, your estate is subject to the intestacy laws in your state. The state will divide up your assets according to these directives.
This could mean your belongings go to the “wrong” people. If you want to make sure a sibling inherits your car or a child receives a trust, setting up a will is the only way to do it.
The state may even appropriate your assets, putting them into government management.
If you happen to have any loans, a will may make provisions for how to deal with what you owe.
3. Wills Protect You during Life Too
You rarely hear people say, “I need a will” except when they’re considering the end of life. A will could help you during life as well, though.
In a will, you can describe what actions should be taken if you’re ever injured or disabled. You may leave directions for care if you happen to be unable to speak or make your own decisions. You might also include clauses about what should be done if you’re on life support.
These clauses are often known as advance directives. They’re becoming more common in wills. Medical technology is advancing and can prolong life, sometimes indefinitely.
Situations where people are disabled or in comas can cause fights among relatives. You can spare them this by telling them about your wishes in a will.
4. Naming Legal Guardians
If you happen to have dependents, you need a will. Most often, this will be children who are under the age of majority. It could also be a relative who is still a minor, or someone who is unable to make their own legal decisions.
“Why do I need a will in these cases?” people ask. The will allows you to name legal guardians for these people.
You can choose the person you think is the best fit for the job. If you don’t have a will, then the state will select a legal guardian.
This may be the same person you’d nominate yourself. It might also not be. It could be next of kin, who may be someone you don’t believe is the right choice.
5. Reduce Your Estate Taxes
Your estate will be subject to estate taxes. Generally speaking, these taxes are paid on the assessed value of the estate. Your executor may have to liquidate assets to pay the tax bill.
One way to lower estate taxes is to give away assets. If you donate to a charity or transfer a bank account to a relative, this asset is no longer included in the estate.
In turn, your estate’s value is lower. You’ll then pay less in tax.
For most people, the management of their estate falls to a spouse or child. If you’re young, it may also fall to a parent or a sibling. They’ll be responsible for the tax on your estate, which could increase their financial burdens.
A will can help you reduce this added burden. Your loved ones will likely face a difficult time if the unthinkable happens. Take steps now to make it even a little easier for them.
Make a Will Now
Why have a will? These five reasons should show you the value of this legal document. They’re not the only good reasons to make sure you have a will either.
No matter your age, health, or wealth, having a will is a smart plan. Making plans for the future is never a bad idea.
Are you looking for more great advice on how to prepare for your future? Check out our blog for more on finance, health, and lifestyle. Plan for your future today for a brighter tomorrow.