Far too many people spend decades accumulating wealth and assets to protect their loved ones, but do not spend half a day to discuss how these assets should be distributed. A 2014 survey revealed that 51 percent of Americans aged 55 to 64 and 62 percent aged 45 to 54 do not have a will.
This sort of behavior is absolutely irresponsible. Yes, no one likes to think about the prospect of dying. But leaving your family without any knowledge of how you want to divide up your property should also make you afraid. Dying without a will is called “dying intestate.” In that scenario, the government decides who gets what, and the government is an impersonal body which will take into account either your or your family’s wishes, never mind the fees or taxes which they can charge.
Wills and lawyers
If you actually want some control over how your property is divided, you need a will. There are several key aspects which you need to consider on drafting one.
The first thing to think about is naming an executor. The executor is who will actually carry out the instructions in your will, take care of your property, and pay what debts you have. You should select one person as well as an alternative choice should the first people be deceased. Look for a financially responsible person you can trust and consider naming a lawyer or accountant your executor should you own a lot of property or if you believe there would be major complications in carrying out your wishes.
Other things to consider when drafting a will include getting it notarized depending on state law, making sure that its wishes are understandable, and leaving it where it is easily found. While you do not need a lawyer and can draft one yourself with templates such as the one here, it is recommended to consult one to ensure that everything is clear.
Looking beyond a will
The will is the first and most crucial part of protecting your legacy, but it is not the only thing you should be thinking about. Two other important things to consider are a power of attorney (POA) and insurance. A POA is necessary in case you are incapacitated and will grant someone you name the authority to pay your bills and act on your financial behalf. Just like with an executor, you should take care to name someone you trust and is financially responsible.
You should also take out a life insurance policy to make sure that your loved ones are not hit with a sudden loss in income and are capable of paying off your debts. While finding an exact number is difficult, NerdWallet recommends that you should track your obligations and assets and buy a policy which can handle any problems your family may have should you depart.
On top of the three aforementioned things, there are also trusts as well as ways to ensure that estate taxes don’t leave your children with nothing. But having a good will, a POA, and insurance to protect your family are the basic steps which anyone should have to protect their legacy.
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