“Estate planning” might sound like something only the elderly do – or the extremely wealthy. Maybe you’re thinking, I’m only 30, I don’t have kids or own a home – why would I need a legal will?
Wills and other estate planning documents are certainly vital ways to protect your children’s future and transfer property like a house, but there are a lot of other reasons to have a will. For example, do you care about who would get family heirlooms that you have? Or personal items like collectibles, musical instruments, antiques, art? What about more private things like diaries and photos?
If you die without a valid will, the state decides who all that will go to. And don’t you want some control over who gets everything that you hold dear?
The specific type of estate plan you need is going to vary based on where you are in life and whether you have dependents. If you’re wondering how to make a will, here are some things to consider based on your circumstances.
Single, no children
Having a plan in place is vital if you want to be in control over what happens to your finances, property and other assets. If you don’t have a will or trust and the state has to decide, it generally doesn’t take into consideration special circumstances — like maybe you haven’t seen or spoken to your brother for 14 years or you want to split your possessions equally between your divorced parents. The state usually just gives it to your closest family member. By putting a will or trust in place, you will ensure that the state knows who you do and do not want to receive your assets.
Estate plans aren’t just about what happens after you’re gone. They also dictate what should happen if you fall ill and/or become incapacitated. As a single person, you need to name someone who can make medical and financial decisions for you should you become incapacitated. Otherwise various family members could be left fighting over your wishes about things such as life support or other extreme measures.
Unmarried but in a relationship, no children
Even if you’re in a decades-long relationship, keep in mind that the government does not recognize the relationship unless you have been civilly married. This means that if you’re in a serious relationship and want to make sure your assets go to your partner, you’ll need to put together a will or trust. Otherwise the state will generally distribute your estate to your closest family members.
If you’re not married and become incapacitated, your partner will only be seen as the authority for medical and financial decisions if you give him or her that power in estate planning documents known as “powers of attorney.” These documents name who can act on your behalf in these areas and specifies how much authority they have over your medical and financial decisions.
Unmarried, have children
In addition to all the specifics outlined above for those without kids, you have additional things to consider if you do have children. Perhaps you’re in a relationship with someone who is not the biological parent of your minor children, and you would want the children to go to your partner if something happened to you. You need an estate plan to make this happen.
If your partner is also the biological parent of your minor children, you’ll still want to put together a will or trust that details who would be your children’s guardian if something happens to both you and your partner.
Married, with or without children
Beyond a basic will that dictates who gets what and who would look after any minor children, many married couples use estate planning to minimize taxes. In addition, if your wishes aren’t clearly laid out, your loved ones can rack up expensive legal fees and court costs trying to figure out what should be done with all your assets.
You might make the assumption as a married person that you don’t need clear legal directions about who makes financial or medical decisions for you if you become incapacitated because your spouse is the default. However, no matter how close you and your spouse are, if you become incapacitated there is no guarantee that they will know what your wishes are for medical care. And if they do know, they might feel torn about enforcing some of those more challenging decisions without something in writing. Making medical care designations such as a health care power of attorney part of your plan ensures that your wishes will be carried out.
Separated, divorced and/or remarried
The more complex your family situation is, the more important it is for you to have an estate plan. You will want to make sure that you have documents in place that dictate who is in charge if you’re incapacitated and how assets will be divided. Without these documents, the courts will be left to decide. For example, if you are separated from your spouse but not yet legally divorced when you die, unless your estate plans state otherwise, your spouse may still receive your assets.
If you remarry, you will need a plan to determine what assets you want to combine and what you want to keep separate, particularly if one or both of you have children. A detailed estate plan will also ensure that assets such as life insurance policies, bank accounts and retirement plans are passed on to the appropriate people.
An estate planning attorney can help
If you’re thinking about creating a will, ask an experienced estate planning attorney for help. He or she can help you understand why you should have a will, what to know about the details of a will and more.