Essential issues when drafting a will
Never easy to do, the peace of mind a will is worth the effort
Drafting a will isn’t something anyone looks forward to doing. But the fact is it can give you immense peace of mind to know your children are cared for if you die unexpectedly.
Imagine if both you and your spouse die at the same time, or, if you, as a single parent, pass away. What would happen? If you do not appoint a guardian for your minor child, the state will appoint one for you. You are the best person to decide who should care for your child if you were to pass away unexpectedly. Naming a guardian for your child in your will is your chance to appoint the person who you think will do the best job. Get that person's permission before you name them, and, consider his/her health, age, financial means and willingness to care for children.
You want the best for your child. You might want to consider setting up a trust for him or her. Typically, any estate money bequeathed to a minor is held until he or she reaches the age of majority in the state (typically 18, but check with your state). At that time, the money is given in one lump sum after taxes. A trust allows you to make sure the money is distributed when your child is older, or earmark it for specific expenses, such as education. Talk with your lawyer about possible options.
Basic wills can be found online or you can draft one with a local attorney. A New York Life agent can help make sure your children are financially secure. To find out how our life insurance and financial products can help with your family’s financial security, click Talk to us.
Here are some of the more common rationalizations for not creating a will, and the facts that may quickly dispel those myths.
Myth: “My assets are so small that a will is not necessary.”
Fact: Think again. Few people are worth so little that a will is not necessary. Add together the value of your home, car, furniture, jewelry, savings account, and financial portfolio. Subtract from this total your personal debts. The bottom line is that you may be worth more than you think. Even if some items do not hold great monetary value, they could hold an enormous amount of sentimental value. Failing to indicate who receives these treasures in your will may cause friction between family members.
Myth: “When I die, my spouse will get all of my assets.”
Fact: If you and your spouse own assets jointly, at death your share of the assets will automatically go to the surviving spouse. But, what happens when your surviving spouse dies? What will your children receive? Does your spouse have the financial know-how to manage the family wealth? If your spouse remarries, some or all of your spouse’s assets may wind up in the hands of his/her new spouse.
Myth: “I can create a will on my own and save the legal costs.”
Fact: “Do-it-yourself” wills often do not contain all of the necessary components as required by law. A vaguely worded clause may result in lengthy legal battles. Anyone who might benefit from the invalidation of your will can contest it, and if the courts decide in his or her favor, your estate may be required to cover legal costs. Remember, the money you save now by not setting up a will may cost your loved ones hundreds or thousands of dollars later.
Myth: “I don’t want my final wishes to be set in stone. I’ll create a will later in my life.”
Fact: A will is a flexible document whose terms can be changed as often as needed. In fact, any legal expert will tell you that a will should be re-examined periodically to make sure it is up-to-date.
A will should receive a checkup whenever there is a substantial change in your life. Remember, the terms of a will only become effective at death.
Basic wills can be found online or you can draft one with a local attorney. A New York Life agent can help you make sure your children are financially secure. To contact a local agent, click Talk to us.
This material is for informational purposes only. Neither New York Life nor its agents provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions.