5 Factors to Consider When Making a Will

4 Factors to Consider When Making a Will


It does not matter how old you are or how much money you have. Experts say an estate plan is a must-have for almost everyone, and making a will is a solid first step. Here is what you need to know to get started.

First, do not put it off. No matter your age or your assets, creating a will is the most basic part of an estate plan, and not having one can leave your finances to intestacy laws. Intestacy laws give the state the power to determine how your estate and assets will be allocated. Many times, these things go automatically to your spouse and children, but not always. A will can make it clear where you want your money to go, which not only protects your financial intent, but also eliminates a lot of stress and confusion for your loved ones. To make a will that is solid and credible, take the time to consider these factors.

1. Do not think DIY. There are a lot of software programs and do-it-yourself will “packages” that claim to give you the ability to create your own will without the need for planners and attorneys. However, many of these kits are not state-specific, thus they may not apply the laws relevant to where you live. Also, an online program likely will not be able to address the specifics of your exact financial situation or offer you alternatives or opportunities when it comes to providing for your loved ones. Also, many packages will allow you to outline your wishes and intent but may not provide the processes for your will to be signed and finalized properly. This will leave you with a document that does not hold up under legal scrutiny.

2. Take stock. A next step to making a will is to identify exactly what you have. This is where many people overlook things or don’t consider everything that can fall under an estate. Create a list or spreadsheet of all your financial assets, including bank accounts, credit card accounts, investments, life insurance policies, and retirement funds. It’s a good idea to list account numbers, the financial institute they’re associated with, and any passwords or access instructions. Think of property including homes, land, vehicles, jewelry, or personal items. Also, think outside the box about the things you own that you might not consider valuable – domain names, social media accounts, or payment vehicles like Venmo or PayPal. Consider anything you have that might have value to your loved ones. (Keep in mind that joint property or bank accounts with a spouse will be automatically passed on to the surviving owner.) Once you have all your information compiled, store it in a safe place, but not an inaccessible place. You want your family to be able to find things easily and make decisions quickly and accordingly.

3. Choose your beneficiaries wisely. If you have kids younger than 18, part of making a will involves choosing who you would like to be their legal guardian. It’s a wise decision to appoint someone else to be their trustee. Also, review your other accounts and make sure any designations of beneficiaries are current and still appropriate. Sometimes life moves quickly, and an old account you overlooked may have former spouses or partners still listed as the beneficiaries. Not acting on this can cause chaos and bad feelings when the time comes to settle your affairs. Keep in mind that beneficiary designations come before anything that’s outlined in the will. Having the wrong beneficiaries listed can have your money going where you no longer intended.

4. Hire a pro. Identifying your assets and making sure the mechanisms you put in place do not result in added stress or extra fees or taxes can be challenging. Tax laws change frequently, and life events can happen quickly. A divorce, a death in the family, or the birth of a child can all change how you want your will set up and how you list your beneficiaries. This is where a professional can help you take advantage of opportunities and set up your affairs properly and legally, as well as update them as needed. Making a will is a serious step, and a professional consultant can ensure that your estate is in order and your assets are distributed as you intended. Best practices include not only creating a will as part of our retirement plans and estate plans, but also reviewing it every five years to make any needed changes.

A will can be a powerful tool for your financial planning, and it can provide you and your family with peace of mind. To learn more about making a will that will be a sound and legal vehicle to carry out your wishes, a financial planner or an estate lawyer.


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