One of the most important legally binding documents you’ll need in your lifetime is a will. A will is a formal legal document that states your wishes and explains how to administer your property when you die so there is no fighting between family members. It will also likely include your wishes for your final arrangements so when the time comes, your family will know exactly what to do to.
Types of Wills
Before deciding on a time to draw up your will, you need to first decide what kind of will you need:
- Simple: This basic will leaves simple yet straightforward instructions for dispersing your property. It does not deal with complicated trusts, investments or other financial situations. This type of will is used if you don’t have children under the age of 18 and very few assets to leave when you die.
- Living: This is a document that details an individual’s wishes regarding medical treatment when he can no longer express his informed consent.
- Trust-Related: This type of will is sometimes used in conjunction with trusts when you want to make sure your beneficiaries receive your intended property with having long, drawn-out probate court visits. There are two types of trust-related wills:
- Testamentary trust: Creates a trust when you die and then some or all of your estate is moved into it.
- Pour-over will: Ensures that anything that you did not put into a trust before your death will be put into it after your death.
- Handwritten: Also known as a holographic or olographic will, this type of will is written in your own handwriting. If it is not witnessed, as long as it is signed and dated by the testator, it is considered valid.
- Oral: Also known as a nuncupative will, an oral will is spoken to at least one or two witnesses before a testator’s death. Oral wills are not recognized in all states; however, those that do typically require that it is created on the testator’s deathbed and be written down by a witness after the death occurs. This type of will can only distribute a small amount of property.
When Is the Best Time to Create a Will?
As the adage goes, there’s no time like the present. Of course, when it comes to finding the best time to draw up a will, it truly depends on your specific circumstances. However, the experts say there are some very specific times to create this document with the most important being right before you make an important personal or financial commitment such as:
- Getting married, divorced or remarried: These life events mark significant changes in your personal relationships and probably the beneficiaries you have named. It is vital to include or remove your spouse so your will reflects who you want in your will. Remember, wills drawn up before you are married are automatically cancelled when you get married unless it is specified in the will. If you are getting remarried, you need to make sure that not only is your new family provided for, but provisions for any spouses or children from previous relationships are outlined.
- Having children: After you have your first child, it is imperative to have a will in place so he or she is provided for in case of an untimely death. However, if you die without a will (intestacy), your children would still receive a portion of your estate although the division may not be what you would have wanted. This is also the time you would want to name a guardian for each of your children. If you do not have a will that does this, the courts will decide for you. Selecting a guardian ensures that the person you want to take care of our kids when you die actually does the job.
- Starting a business: If you are part of a family business, which may be several generations old, and you are grooming your children to take it over when you retire, you will want your will to reflect these business plans. You will also want information outlined how you want your business passed on to your next of kin.
- Purchasing property: Buying a new home represents a significant change in your estate’s value, both an increase or decrease. It also affects who your beneficiaries are and how much you leave them when you die. You should create or update your will any time you buy or sell a large asset so you can outline how they will be distributed.
- Health issues: If you or your loved one has had a brush with death or have undergone some significant health issues, then you will need your will in order in case of your demise. This is also a good time to get a living will in place if you can’t speak for yourself if you are in a hospital.
The most important reason to make a will is to make sure that your possessions and assets are distributed according to your wishes. Laws vary from state to state, but in some areas, where you reside will determine how your assets are distributed if you don’t have a will. For more information on wills and how to plan for the future, contact Grace, where our experts can answer any questions you may have.