When you do need a will? Pretty much the moment you own any assets at all, assuming you want to leave those assets behind to a loved one.
According to AARP, more than 60% of Americans under the age of 72 don’t have a will. The same AARP study found that 81% of people over the age of 72 have a will.
The findings of this study demonstrate that most people don’t appreciate the need for a will until they get older and closer to their statistical likelihood of passing.
Yet many people should have a will sooner, especially once they start families, buy a home and begin to amass assets.
When do you need a will?
It may be difficult to imagine the importance of a will, especially when you are young and starting out in life.
However, if you die without a will and leave appreciable estate, then you automatically cede control of your estate to your state of residence.
The laws of your state then will decide who your legal heirs are, and the state will designate an executor who will liquidate and distribute the value of your estate according to that state’s laws.
Spouses and blood relatives are usually legally favored as heirs.
However, ex-spouses, friends, estranged relatives and anyone you knew in life can go to court to fight for a piece of your estate after your death.
That’s why making a will is key to ensuring your assets are disposed of as you would like.
You don’t have to be a millionaire to need a will. And having one is a legally robust way to protect your estate and provide for the interests of your loved ones after your passing.
The difference between a will and a living will
The simplest and most legally enforceable method to protect your estate is to draft a traditional will plus what’s called a “living will.”
A will names to be the executor of your estate. A will outlines exactly how you want your assets, savings, property and every belonging comprising your estate to be distributed and to whom after your death.
A will is a legal document that expresses your posthumous wishes. A will cannot be enforced until after your death.
Depending upon the legal mandates of the state you live in, you may need one or two witnesses and a notary stamp on a will.
A living will, sometimes called an advanced directive or advanced healthcare directive, will determine what kind of medical treatment — or express refusal of medical treatment — you may desire in situations in which you won’t be able to express your preferences.
A living will thus ensures that your medical treatment will be carried out in the case of mental or physical incapacitation.
Depending on where you reside, a living will can act as a durable power of attorney.
Unlike a regular will, a living will is legally enforceable while you are still alive.
How much does a will cost?
It can cost anywhere from less than $100 to thousands of dollars to draft and notarize a will.
Much depends on the complexity of your finances. In some states, you may be able to draft a will legally on your own.
There is no reason not to draft a will of some kind, even a free one using an online legal service. It can save your family and loved ones a lot of hassle and problems after your passing.
Choose your power of attorney wisely
A power of attorney or executor are just fancy terms to describe someone — a relative, friend or lawyer — who is legally empowered by you, via the will or living will, to carry out decisions concerning your estate in your stead.
You must expressly state in a will and living will who you want to act as a power of attorney in your interests and the scope of their decision-making powers.
Make sure you choose your power of attorney wisely. You are legally ceding power to this person to make decisions concerning your estate and possibly your life if you are incapacitated.
Stay up to date
Update your will regularly. Otherwise, the distribution of your finances could be fought over by relatives and heirs in court.
The point is that it is not a bad idea to have a will as a form of insurance to protect your estate. Dying without one opens you assets up to legal costs and delays that your heirs are likely to find frustrating and wasteful.
More than 60% of Americans never even bother to get a will. Considering that, most who do probably don’t even bother to update them as necessary.
What happens if you die without a will?
Nothing good. Everyone you knew can inquire about the worth of your estate.
An ex, an old business partner, relatives, friends or anyone you knew in life. Just because they might not win a piece of your estate doesn’t mean they won’t try.
Your estate could be tied up in lawsuits for years as a result.
The value of your estate could be liquidated to pay for legal fees for people fighting to gain access to a steadily dwindling fortune. Your estate could go broke just from competing lawsuits.
Unless you establish a fund or gift them, your pets might not be cared for after your death. You may not be given the funeral you desire unless you specify your exact wishes in a will.