Preparing a will expresses your desires and intentions in the distribution of your assets. Getting your will in order will avoid potential conflicts among your heirs. You should consider preparing a will an essential financial exercise.
In some cases, if one dies without making a will, a large portion of the assets left by the deceased goes to the government, possibly amounting to more than 50% of the net assets. Therefore, preparing a will is necessary to protect your savings and assets, and their orderly and smooth passage to the intended beneficiaries.
It's estimated that 50% of Americans die without a will. In these cases, the state steps in, and the court decides the issue of inheritance. This delays the acquisition of assets, and in some cases, the delay erodes the assets' value. For instance, if a portion of the assets are invested in mutual funds and stocks, their value may deteriorate without active management during the period of legal formalities.
If you have young children, you can use a will to designate a guardian of your choice to look after your assets until the children are of legal age.
Elements of a will
- A will should have the name and the residential address of the person who is writing or preparing the will.
- A will should contain a complete and detailed list of all your assets.
- A will should contain names and addresses (or other identifiable details) about everyone whom you intend to give your assets: they may be your children, relatives and friends, and other beneficiaries.
- It is always a good idea to give names of alternative beneficiaries in case the named beneficiaries die before the will becomes effective.
- You should also indicate special gifts you intend to give to anyone. For instance, you may like to give some personal effects, like watches or jewelry, to a particular person. You should clearly mention such details in your will.
- If you want to establish a trust to manage your assets, outline details about the trust.
- You should not forget to mention about your debts and about their repayments.
- You should mention the name of a guardian for your minor children. Proposing an alternative guardian is always prudent if the first guardian named by you refuses to act as the guardian.
- You should name an executor of the will -- that is, the person who shall carry out the will.
- You should sign the will and obtain the signatures of witnesses.