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Do I need a will? How it works & what to consider

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Thomas Barwick/Getty Images

If you're an adult who owns anything, even if you have minimal assets and no children, you need a will. It's even more important if you have a family. The good news is that creating a will doesn't need to be complicated, and you can always make updates as your circumstances change.

Think of your will as a gift to yourself and the people you care about.

Why is a will important?

If you own any assets or personal property, you have an estate. Managing it boils down to communicating your wishes today for yourself, your things and your loved ones because there will be a time when you won't be able to state those intentions. As part of the estate management process, you can choose who will act on your behalf to make financial or medical decisions if you're not able to do so yourself.

You can also name beneficiaries for certain assets, including a 401(k), an individual retirement account (IRA), a life insurance payout or an annuity, even your checking and savings accounts. Those assets are immediately transferred to designated beneficiaries upon your death.

A will has its own role to play for other assets that cannot have a beneficiary and for your loved ones. At a high level, you can use a will to:

  • Instruct how you want to distribute the bulk of your money, property and belongings.
  • Designate an executor, which is a personal representative who can carry out your directions and requests.
  • Name guardians for your dependents.

What to consider when preparing a will

Here's a checklist to help get you started on this important project:

  • Hire an estate attorney. Although you can draft a will without an attorney, you can serve yourself well by hiring a professional who knows the ins and outs of these legal documents and can verify they're legally enforceable in your state of residence. Choose an attorney who can work in tandem with your accountant and financial advisor; their expertise can help you devise a will that best suits your interests.
  • Name an executor. Giving the task to your spouse or an adult child can save the fee for a personal representative, but it's a good idea to confirm they're comfortable with serving in that role. You may want to designate the role to a bank or trust company if your estate is large or complex. The responsibilities of an executor include:
    • Offering the will for probate
    • Gathering and organizing an estate's assets
    • Paying valid debts, the estate's administrative expenses, and federal and state income and estate taxes
    • Carrying on or liquidating investments or business interests
    • Distributing the remaining assets according to the will's instructions
  • Identify potential guardians. Ask the people you trust if they're willing to take care of your minors, dependent adults or pets. It's a lot to ask of someone, and you should walk away from the conversation with confidence that you're making the right choices.
  • Inventory the assets you want to distribute. Those include your cash, house, car, real estate and valuables.
  • Think about relatives and friends you'd like to pass something to. Whether it's as big as a home or as small as a special trinket, mull those decisions over and consider discussing your intentions with those special people, especially regarding large assets. Potential beneficiaries may have different expectations and desires about those items.
  • Consider charitable giving. Determine if there are bequests you'd like to make to churches, educational institutions, charities and other organizations.
  • Catalog your debts. Document any outstanding debts you may have, from a mortgage or car payment to unpaid bills and student loans. The executor you name will help with resolving those debts when the time comes.

How does a will work and why is it important?

You can accomplish a variety of objectives by setting up a will, including:

Protecting those in your care

If you have young children, your most urgent need is to make sure they can be raised with love and resources if something happens to you and they don't have a surviving parent who can raise them. You can name a guardian and include specific instructions for your children's upbringing in your will. You can also name guardians for adult dependents and for your pets.

Passing on generational wealth

If you've been able to build wealth over time through investments, real estate, family businesses and other holdings, you can pass down these assets to your kids and grandkids. Transferring generational wealth is a way to help them reach financial security and, hopefully, create a gift that keeps on giving. Transferring wealth can help you leave a legacy that can endure for generations.

Cementing your values

You likely have a few causes that are important to you and aligned with your values. You can pass on money to these causes or the organizations that support them, like your church or any charities you hold dear. Doing so can benefit those entities and send a powerful message to family members who may be inspired to continue your tradition of generosity.

In addition, if higher education is important to you, you can specify that funds are designated for your children's or grandchildren's college education.

Specifying who should inherit meaningful treasures

You can gift items that may not have a lot of financial value, like your grandmother's recipe collection or the clock that's chimed in your home for generations. Chances are those items hold significant sentimental value to your family members, and you can document who you'd like to have them.

Describing your final wishes

It's not easy thinking about what should happen to your body after you've passed, but in your will, you can state your preferences about your burial or cremation. You can also share preferences about your funeral arrangements.

Determining how debts should be paid

Many debts don't disappear when someone dies and may become financial obligations for their estate to pay off. You can specify which assets should be used to repay debts, like funds in a bank account or tangible assets, like jewelry, that you aren't gifting to a loved one.

A will can ease the burden on grieving heirs

You can probably imagine how chaotic and upsetting things can get for families whose loved ones pass away without leaving these and other important directions. Dying intestate, which is the term for passing away without a valid will, can make a terrible situation even worse.

Not having a will can complicate probate and run up costs. Probate is the legal process for collecting a deceased person's assets, liquidating liabilities, paying taxes and distributing property to heirs. Establishing a revocable trust, which is also called a living trust, is a way to help your heirs potentially bypass probate court. You can have a trust or a will or a combination of the two.

If you have a valid will, the probate court generally allows the division of your assets to proceed as you instructed. Without a will, the court makes these important decisions for most, but not all, of your assets according to state laws. Exceptions include assets:

  • In a revocable trust.
  • That automatically go to a designated beneficiary.
  • That transfer through operation of law, like property held in joint tenancy or property with a transfer on death designation.

Intestate laws regarding property distribution vary among states and can get complicated. Consider Minnesota's rules: In that state, a deceased person's property goes to their spouse and children according to a set formula. If someone doesn't have a living spouse or children, the state determines who else would serve as heirs.

Does a state factor in the stepchildren you'd like to leave money to? Not usually. Does the state know you would choose to leave more property to one child and less to another? Not likely. There's a lot your state can't possibly know about your intentions, and you and your loved ones probably don't want your estate divided up based on your state's cold calculations.

And here's another discomforting complication: If you die without a will and your minor children don't have a surviving parent or one who's able to raise them, the courts could appoint a guardian for them.

Keep your will up to date

Don't think of a will as a static document. Rather, plan to review it at regular intervals. You want to make sure it continues to match your intentions and your life circumstances. Plus, you don't want to leave out loved ones who have entered your life since you drafted it. Also, sadly, there may be others you wish to disinherit.

As this workbook-style guide about wills explains, some events that would necessitate making updates include:

  • A change in marital status
  • The birth of a child
  • The death of a spouse or child
  • Starting or terminating a business
  • Moving to another state
  • Acquiring or inheriting property
  • Retirement

On a related note, you should also regularly review your beneficiary designations for investment accounts and other assets that aren't part of your will and go directly to beneficiaries.

Now is a good time to create a will

As you can see, not having a will—or opting for a simpler alternative—can put your good intentions at risk for those you love. A will is one of the best tools you can have to preserve family relationships and can help make sure your values and legacy carry on after your passing.

Consider connecting with a financial advisor to learn more about why you need a will and to gain additional insight into the protection it can provide your heirs. While Thrivent does not provide specific legal or tax advice, we can partner with you and your tax professional or attorney to create a will that gives you a sense of reassurance and control.

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Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.

Hypothetical examples are for illustrative purposes. May not be representative of actual results.
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