What a Will Can Do for You

A will is a legal document that allows a person who has died to tell living people what to do--and they have to do it! This is an awesome power if you think about it. Not only does this allow a person to speak from beyond the grave, a will also achieves a level of obedience that is seldom seen during life.

The most common function of a will is to transfer the ownership of assets from the deceased to a designated beneficiary. Any assets that don't transfer automatically upon a person's death (such as retirement benefits with a named beneficiary, or real estate and bank accounts owned jointly with another) end up as part of the estate. A will, then, acts as a back-up plan for distributing the assets that don't transfer automatically once they are placed in the estate.

On a similar note, a will specifies who is to inherit assets from the estate. A will can be used to distribute assets to specific persons or to favorite charities. A will can also be used to leave a gift of a cherished item or monetary amount to somebody special left behind (e.g., caretaker, family friend, colleague). Without a will, assets in the estate get distributed according to rigid state rules that don't always match your intentions, especially if your assets end up by default in the state's coffers.

Tip Dying with a will is referred to as dying testate and the person who makes a will is referred to as the testator (derived from the phrase last will and testament). The opposite of this is dying without a will (dying intestate) and the unlucky person in this case is referred to as the intestate.

In addition, a will can be used to accomplish the following:

• indicate your funeral and burial arrangement wishes
• provide a stream of income to your family while the estate is being administered
• help distribute a sudden increase in wealth that is acquired prior to a person's death, but not transferred automatically afterwards
• make sure (to a limited extent) that certain people don't get any inheritance
• name who fills the very important post as executor of your estate
• help minimize the impact of federal estate taxes
• prepare for the care and maintenance of a minor child, a legally incompetent adult, or a pet
• suggest a guardian for your minor children in the event one is needed
• provide peace of mind by acting as a safety net should some of your assets not transfer automatically at your death

Tip If you have minor children, it is highly recommended that you make a will if for no other reason than to name a guardian for them. Although the court deciding your children's fate does not have to follow your instructions, courts usually give a lot of weight to a deceased parent's wishes. Without your input in a will, a court will probably award the custody and care of your children to the nearest available relative (which may or may not be the person you want raising your children. The flip side to this issue is that you actually have somebody you can name as guardian. Like parenting itself, this is an awesome responsibility that should not be entered into lightly. You should carefully select your guardian. You should also obtain their consent in advance before listing them in your will. Remember, a chosen guardian does not have to accept this responsibility and can refuse to take your children. A good source of potential guardians is close friends or family members with children of their own. Since they are in the same position as you, you can agree to make reciprocal provisions in your wills to take each other's children if needed.

© 2024 Wolters Kluwer. All Rights Reserved.