Ask yourself, “What will happen to my property if I died suddenly without a will.” If you know the answer and are happy with it, don’t read on. If on the other hand you are unsure what will happen to your property, let me tell you. The government of your state will distribute your estate according to a legislated formula and they will make assessments on whose care your children will be under.
A properly prepared and signed will provides instructions on what to do with your estate after your death. Any person can make a will provided (a) they are over eighteen years of age or married and (b) are of sound mind. Other important matters include (a) the will needs to be signed and dated, and (b) the signature must be witnessed and the people witnessing your signature must know that they are witnessing the signing of a will.
A will can be made using the “Will Kits” available from stationery suppliers and other stores or they can be drawn up by an estate planning attorney. The “Will Kit” is significantly cheaper, and for straight forward situations usually covers the important matters well. Books are available with sample wills for easy reference. Seeking professional advice is recommended for complicated and unusual situations, especially where businesses are involved. Skilled attorneys are able to ask you questions that cover many of the nuances that exist in wills today.
The four important reasons for having a will are:
1. The distribution of your estate will be carried out how you wanted them to be carried out,
2. The planning of the distribution of assets can reduce the taxes and government charges that may be otherwise levied on the transactions,
3. The nominating of guardians for children who are minors, and
4. The prevention of government from managing the distribution.
A well prepared will includes the following (as a minimum):
1. A description of how, when and to whom the estate is to be distributed. This could include directions on who to exclude and your charitable intentions, if any.
2. A nomination of who will be the executor of your will. This person is the one who ensures that your wishes are indeed carried out. Choose this person carefully as they will have an influence on the process.
3. A nomination for a person to be the guardian of any children who are still minors.
Most people will need to alter their wills from time to time when their situation changes. Changes in marital status, employment status, investment status and other births, deaths and marriages may impact your thinking about how your assets are to be distributed. Minor changes can be made on a document called a codicil, but the changes would not change the general intent of the original will. For major changes the earlier will needs to be revoked and a new well prepared and signed. This makes dating of wills very important. Maintaining currency of names and addresses make the distribution surer, if other information is also included like employment, along with residential address.
It is important to understand that not all property may pass through a will. Life insurance beneficiaries are nominated on the life insurance forms and may not form part of an estate. Joint tenancy arrangements in some states live outside the will. The surviving tenant may receive the entire joint tenancy. Some retirement or superannuation plans have nominated beneficiaries. Trusts may also be directed by a different set of rules. Understand these instruments and make the necessary arrangements to ensure the correct beneficiaries receive them.
Every adult should have a will in order to give instructions about distribution of their lifetime accumulated wealth. It makes a lot of sense to give clear instructions. So, if you still have not made a will, do it, and if you have review it!