The number of Americans who have never created a will is astounding. Some figures put it at 70 percent. That means the heavy majority, if they passed away tomorrow, would have absolutely no plan in place to distribute their assets.
Wills are very important documents, regardless of age or wealth. Many people think an estate plan is just for the wealthy, but that’s not the case. Here are a few reasons you might want to get a will filed as soon as possible.
1. You decide what happens to the kids.
A will can address more than just assets. It can allow you to lay out a plan for who will take care of the kids. They mean more to you than anything that you own. Good planning can be critical to ensuring they live happy and healthy lives, even if you’re not there to see it.
2. You determine who gets specific property.
While all wills are different, you likely don’t want to leave everything to the kids to divide up. You want to leave specific assets to specific people. Your daughter may want the family home so she can raise her own kids there. Your son may need money to put his children through college. You may want to pass family heirlooms like art, books, jewelry and the like on to the kids that value them the most, regardless of the financial value.
3. You can eliminate family fights.
By telling people specifically what you want to happen with your assets, you can sometimes cut off family fights and disagreements before they happen. If the children are left to divide things on their own, there could be disagreements about what is fair. With a will that clearly states what should happen, even if they don’t like it, they may be less likely to fight with one another.
4. You can address complex assets.
It may not be hard for the children to drain your bank account and split up the cash you have on hand. But do they know what happens with more complex assets, like Roth IRAs, pension plans and life insurance policies? Have you considered the tax implications of the wealth that you’re leaving behind? Do your kids even know how to access your investment accounts or do they know about all of the business ventures you have? Wills can help with a wide range of issues related to complex assets.
Making a plan
One of the biggest reasons that 70 percent of people don’t have a will is that they realistically think they’re nowhere near death. Hopefully that’s true, but it’s often better to plan as if it’s not. You’d rather have a will you don’t need than need a will you don’t have.