Based on a recent Caring.com survey, two out of every three adults (18 years of age and older) don’t have a will. Even more concerning is that 44% of adults ages 55 and older don’t have any estate planning materials, including this important document.

The most common reason for not having one? Forty percent (40%) of respondents without a will claim, “I haven’t gotten around to it.” Another 33% feel they lack assets to leave for anyone.

In this post, we’ll discuss why you need a will and share examples of when it’s appropriate to update one.

An overview of wills

A will—also known as a last will and testament—is a key document that ensures an estate is settled in the manner the deceased intends. More specifically, the document communicates your final wishes regarding how assets and other possessions are distributed following your death.

Despite what some may believe, a will isn’t just for the elderly. In fact, someone as young as 18 years old (in most states) can create a legally valid will. This document also isn’t just for the wealthy, another common misconception. If you have a bank account, investments, a car, a home, jewelry, collectibles, furniture, and/or an insurance policy, you have assets. However modest your estate is, it’s important to plan for its distribution.

Reasons why you should have a will

There are several advantages to having a will. Some of the biggest include:

Streamlining probate
An important consideration is the ability to streamline what’s known as “probate”—when a court verifies that your will is valid and authentic and ensures the correct parties receive all properties and possessions—as a necessary process for many estates. After the asset-holder passes, the court will also appoint the will’s executor (person or people you choose to carry out your wishes) as part of the probate process.

Passing away without a will (called “dying intestate”) can create several challenges. For starters, the court then makes decisions on your behalf: including freezing your assets until an executor is appointed and determining how to split assets among family members (which can very often vary from your desires).

Probate is also sometimes drawn out, particularly when significant assets are involved. In these situations, it’s not uncommon for months or even years to pass before any money, property, or belongings are distributed to heirs. Although these examples are perhaps rare due to the value of these estates, think about famous but seemingly never-ending probate cases involving celebrities such as Prince and Aretha Franklin (who both happen to be musicians). Their estates were only recently settled despite their deaths in 2016 and 2018, respectively.

Ensuring desired care for minor or special needs children
If you have minor children, making a will can ensure you choose their legal guardian should both you and your spouse pass away prior to your children becoming legal adults. Without a will, a court will choose a guardian for you: who may not be the person you want raising your children.

If your child requires specific care due to special needs, you want to ensure future caregivers honor your wishes. This is precisely why many experts recommend establishing a companion piece to your will called a “letter of intent.” This document—outlining a typical day and activities your child enjoys—will help maximize his or her quality of life and avoid the need for caregivers to learn by trial and error on the fly. The document can also identify necessary physicians, services, and resources.

Minimizing or avoiding family disputes
Having a will can help minimize or eliminate potential disputes between family members: because without a will, the court and family members will need to make assumptions about how you’d like your assets distributed. Odds are they won’t agree on everything, and matters become even more complicated if you have children from a previous marriage and/or you and your current partner aren’t married. Subsequent circumstances can therefore get messy quickly, leading to friction that sometimes lasts a lifetime.

Potentially reducing estate taxes
If you plan on leaving money for charity, a will can help reduce estate taxes (when set up correctly) as your charitable gift is excluded from your taxable estate. In this scenario, you’d leave a bequest—a sentence stating the amount of money, the specific charity, and the purpose for which you’d like the charity to use the funds (or specify “general purposes” so the charity can do so as they see fit)—in your will.

Common reasons to update your will

Various triggers should prompt you to update your will. These include life-changing events, changes made to your bank and other investment accounts, as well as major purchases.

Life-changing events can include getting married (or divorced) and the subsequent need to update your will and account beneficiaries. Having a child will also summon a need to appoint a guardian, accordingly. Once your child becomes a legal adult, you should then update your will so he or she can act as a beneficiary. In the case of your spouse passing, you’ll need to revisit items such as guardianship, beneficiaries, and naming a new executor of your will.

Major purchases such as buying a home, car, or boat as well as account changes including opening or closing bank accounts (you probably don’t want to leave a closed account for someone in your will) also dictate will amendments.

Finally, if you decide to relocate to a different state, you’ll need to ensure your current will abides by the laws in that particular state.

How to create a will

While many types of wills are available, in most cases, a simple will (or last will and testament) is sufficient for most people. Once you decide on the type of will you want, you’ll need to reflect on what it should include (gathering/organizing your assets as well as debts), who will receive your assets (i.e., people and charities), whom to appoint as a guardian if you have minor children, as well as the person (or people) responsible for distributing assets to your beneficiaries  as the executor.

In simple cases, you can produce a will using online software for a minimal cost. However, if you have significant assets, a complicated situation, and/or aren’t comfortable using online tools, you should consult an estate attorney (your financial advisor can often recommend one).

In sum: final thoughts about having a will

Although it’s not fun to think about, the simple fact is that none of us will live forever. By creating a will, you’ll wield better control over your legacy by ensuring assets are distributed how you intend and that your children (if minors) are properly tended to all while minimizing—or even eliminating—potential friction between family members left behind.

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Vision Retirement is an independent registered advisor (RIA) firm headquartered in Ridgewood, New Jersey. Launched in 2006 to better help people prepare for retirement and feel more confident in their decision-making, our firm’s mission is to provide clients with clarity and guidance so they can enjoy a comfortable and stress-free retirement. To schedule a no-obligation consultation with one of our financial advisors, please click here.

Disclosures:
This document is a summary only and is not intended to provide specific advice or recommendations for any individual or business. In addition, this information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.