How Protecting Your Estate With a Will Protects Your Family
While it’s important to take care of family finances now, you should also plan for your family’s future. No one likes to think about death, but in order to protect your family, you’ll need to think about how your family will fare in the event of your passing. Here are some of the reasons you need at least a last will to protect your family’s future.
Protect Your Family With a Last Will
You probably have some kind of life insurance coverage. Have you legally drafted a will? Believe it or not, a lot of people don’t.
Your estate includes your money, house, properties, assets and everything of value you own. The best way to protect your estate after death, and your family’s access to it, is through a will. Yet, about 60% of Americans never draft a legal will. Most people only think about establishing a will late in life. In fact, about 80% of Millennials don’t have a will.
You probably want to bequeath everything you own, the sum of your estate, to your family in the event of your death. If you die without a will, all decisions concerning estate inheritance will be out of your family’s control. Don’t leave your family’s financial security to chance, bureaucratic chaos, and uncertainty.
Establish a Will and Living Will
A will is a legal document that states exactly how you want your estate distributed after death. You’ll name an executor, or representative, to oversee your wishes. This could be a lawyer, relative or friend. In a will, you can dictate who inherits the house, bank accounts, properties, assets, and anything of value comprising your estate.
You can only draft a legal will if you are mentally sound to do so, and it is only enforceable after death. If you gain more wealth, you will also need to update it. If you become mentally and/or physically incapacitated, a living will be enforced while you are alive. In a living will, you name a power of attorney, as an executor, to make sure your wishes are carried out.
Estate Tax Responsibilities
If your estate is worth millions, Uncle Sam may benefit from your estate more than your family. Estate taxes vary from state to state. It may be as high as 40%. If your estate is generating significant income after your death, it can be taxed. Consult a legal professional to calculate estate tax responsibilities.
Don’t Let The State Liquidate Your Estate
If you die without a will, the legal system of your state of residency will distribute your estate wealth. A local judge, lawyer, or legal representative of the state will take charge of your estate. They will decide who your heirs are and how much they will benefit, if at all.
Keep Everyone From Inquiring About Your Estate
If you don’t have a will, an ex-spouse, friends, distant relatives, business partners, and complete strangers could try to claim your estate. Even if they don’t succeed, the ordeal will stress your grieving family. It will also prolong the time it takes your family to rightfully inherit your estate.
Estate Bankruptcy
If multiple people, or the state, lay claim to your estate, your estate may be liquidated to pay legal fees. Your estate may go completely broke fighting lawsuits against people trying to get a piece of it. Lawyers may benefit more from your estate than your family.
Don’t Take Chances
There are a few things you can do to protect your estate and your family’s future. Establishing the last will and/or living will is one of the most important. The research and preplanning will be worth it. Otherwise, the distribution of your estate, and your family’s access to it could be left entirely to chance and the whims of local laws.
Have you planned for your family’s future? Let us know in the comments below.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business