First, let’s go over what exactly a will is, what happens with it after you die, and why, yes, you do need one.
You’re probably already familiar with the basic concept behind a will: it determines where our possessions go when we die. If you have children under 18, too, it has an additionally important role, since it’s the only place where you can legally name the person you want looking after your kids in the event of your death.
A will can also be used to outline how your children would receive their inheritance. Maybe you want to make sure that a certain portion of the assets go toward their college education, or think it’s best for them to inherit part of the estate at 21 and the full amount at 30. All of this can be outlined here.
Even if you don’t have children, though, a will is important: leaving all your belongings to your spouse isn’t quite that easy. If a person were to die without a will, they are considered to have died “intestate” at which point the state determines how the assets are divided. For example, in many states, if you are married with no children, and you die intestate, your assets are generally divided between your spouse and your parents.
A will is a place for you to resolve potential issues like this and others. If you’re single, your friends and family will want to know what your wishes were regarding your belongings. To make sure they don’t end up on a sidewalk sale, and to keep any major arguments between your loved ones at bay, outline your wishes.
Probate
The catch with wills is probate—the arduous process by which a court approves the legality of your will, and allows your assets to be distributed. Your executor must gather the estate assets, inventory them, pay lawyers, taxes, and creditors. Legal glitches and bureaucratic headaches abound during this period, not to mention this process turns your will into a public document rather than a private family agreement.
Probate Estate Exceptions:
Certain items are not included as part of the probate estate, and can move immediately to the beneficiary. These are items such as property owned “jointly with rights of survivorship” (usually real estate or investment accounts owned by both husband and wife), or accounts with named beneficiaries (retirement funds or life insurance policies).
Trusts
Essentially, a trust allows you more control over your assets, both before and after your death, directing where your assets will go and when. A revocable living trust names who will be responsible for your assets while they are waiting to be distributed, which means your family can avoid probate and the frustrations, delays and public airing of the private business that come with it.