Many people don’t like to think about their own mortality, putting off drafting a will and even signing advanced directives. But that can leave both you and your future heirs in a less than optimum position. Parents of young children should always have wills that lay out their plans for the guardianship of the minor children.
Your will is important because it allows you to designate whom you wish to have your worldly goods. Whether you have an heirloom piano you’d like to give to a grandchild or a piece of property you wish to leave to a pet rescue group, dying intestate means that the state gets to determine who gets your property.
Intestacy laws vary between the states, but in most cases, those who die married and who have children will have their assets split among them. Unmarried decedents without children who don’t leave a will can wind up with their property divided between blood relatives of varying degrees in accordance with state laws.
Wills and most trusts can be amended during the testator’s lifetime as long as they remain mentally competent. If you have a will, but wind up divorced, it’s a good idea to review the document for any changes that need to be made. Likewise, beneficiaries may need to be amended on life insurance policies and retirement plans. Parents of young children may want to ensure that their children are the beneficiaries of any policies. When the kids are grown and on their own successfully, it may be wise to change the beneficiary to the surviving spouse, so he or she will have a nest egg for the future.
Trusts are useful, but do not take the place of a will, as wills are all-encompassing and most trusts are quite specific. Assets that remain unretitled in a trust are subject to the process of probate. This can lead to distribution to heirs who might not have been your first choice.
Advanced medical directives are vital documents that detail the extent of end-of-life care and medical interventions you want if your are dying and cannot communicate your intentions.
Are all your estate documents drafted and filed? If not, a trip to an estate planning attorney may be necessary.
Source: CNN Money, “Estate planning: Wills and trusts,” accessed April 08, 2016