Most of us know that we should have a will — it’s just a matter of getting around to doing it. Regardless of the size of your estate, it’s time to stop procrastinating and give some serious thought to what you want to happen to your assets—and your minor children, if you have any—when you’re gone.
Toni Ann Kruse, a partner at McDermott Will & Emery LLP in New York City, who focuses on estate and wealth transfer planning, recommends asking yourself the following questions to help you get started making a will:
1. What do you own?
Write down everything—from cash to investment accounts to real estate to jewelry—to get a sense of the scope of your assets. It’s important to note that you’ve likely got both probate and non-probate assets. Probate assets are covered by your will, and include:
- Cash accounts
- Investment accounts
- Real estate
- Jewelry
- Artwork
- Any asset (tangible or intangible) that’s owned by you individually
Other assets, like 401(K) accounts and joint property, are considered “non-probate” assets and are not governed by your will; instead they are transferred to a beneficiary you’ve designated in the paperwork for that asset. Non-probate assets include:
- 401(k) accounts
- Life insurance
- Joint accounts with survivorship rights (for example, most joint bank accounts have survivorship rights, which means that when one account holder dies, the surviving account holder automatically owns the entire account)
- Assets held in a trust
- Any asset that is jointly titled with survivorship provisions
You’ll want to make sure that information on any of these non-probate assets is up to date and reflect your wishes, since they’ll go to the beneficiaries regardless of whether your will says you’re leaving “everything” to someone different.
2. What assets do you have specific wishes for—and who do you want to get these items?
“Do you want everything to go to your spouse, or is it more complicated?” Kruse asks. If you do have specific wishes, it’s important to designate specific beneficiaries for specific assets in your will, even if you’ve had the who-gets-what discussion before and believe your loved ones know your wishes. “When someone passes away it’s a hard time, and people may not remember things clearly,” Kruse says.
Keep in mind that besides family members and friends, you can also choose to leave assets to a charity, a church, or even your alma mater—so consider those possibilities, too. Plus, if you leave assets to a qualified charity, your estate can receive a charitable deduction against any relevant state or federal estate tax.
3. Who do you trust to lead this process?
Every estate needs an executor—someone you entrust with the authority to fulfill your final wishes. Usually it’s a family member (often a surviving spouse or an adult child) but it could also be a trusted friend, colleague, or even an attorney. “An executor is legally responsible for carrying out the wishes as outlined in your will,” Kruse says. Once approved by the court to fulfill their role, the executor will start collecting and distributing the assets, pay any debts, and other duties involved in settling an estate.
It’s a good idea, but not essential, to check in with the person you have in mind to make sure they’re comfortable serving in this role. “The important thing to remember, especially if you have a large or complicated estate, is that the person you appoint as executor doesn’t need to know how to do everything,” Kruse says. “They just need to be someone you trust to find the answers, file the paperwork, and figure out next steps.”
4. Who do you want to be the guardian of your children?
If you have minor children, you’ll want to name someone to act as their legal guardian in the event that you and your spouse both pass away while they’re under the age of 18. “It’s a difficult question to think about, but it’s truly one of the most important reasons to have a will,” Kruse says. (It’s also a good idea, if you’re confident in your choice, to check in with that person and make sure they’re willing to take on the responsibility.)
You may want to consider, in your will, establishing a trust rather than just leaving money to your children outright, which gives you the option of not only appointing someone to manage the money for them, but also allows you to designate an age at which the kids do get control of their inheritance, so you’re not handing over large amounts of money to an 18-year-old. Depending on your state’s laws, you can have one person be your kids’ legal guardian and a different person in charge of managing their money.
5. Do you want to write the will yourself or hire a lawyer?
Your will needs to be drafted in accordance with the laws of the state in which you live, and written in a formal manner that’s effective and tax-efficient as well. So while online tools are available to help with making a will, this is one area where you might want to consider hiring a professional.
Look for an experienced attorney who focuses their practice on estate planning or wealth transfer (you can ask a trusted friend, financial advisor or CPA for a referral, check an online directory, such as nolo.com, or contact your state bar association). A qualified professional will not only help you with details such as identifying an executor and deciding which beneficiaries get what assets, but they’ll also help ensure that your will is executed properly.
Written by Erika Jane
