You need a will – here’s how to do it
When it comes to tasks no one is eager to tackle, writing a will ranks with buying life insurance. Facing your mortality isn’t pleasant. Fun or not, crafting a will is the responsible thing to do. This legal document decides what happens to your assets after you die, and who raises your children.
Depending on the complexity of your finances and legal relationships, you might be able to create a will without visiting an attorney. For straightforward situations, a new breed of online tools allows you to quickly and easily create a will. Many sites allow you to write a basic will for less than $100 for an individual. Despite the bargain cost, wills created online are legally binding.
Beyond a basic will, there are other end-of-life legal documents to consider. A living will makes your wishes known, and a health care power of attorney enables someone to take over your affairs if you’re incapacitated.
7 things to know about preparing a will:
1. Decide whether to hire an attorney or use an online tool.
If you have a complicated financial life or a large estate, you’ll want to hire an attorney to draw up a will and an estate plan. For most people, though, an online tool is sufficient.
2. Designate your beneficiaries.
Choose who is going to receive your investments, your home and your other possessions.
3. Name an executor.
This trusted person gets the job of making sure the instructions in your will are followed. Assigning this task to a bank or attorney typically means your estate will pay a fee of 2% to 4%. If you choose a family member or friend, be sure to identify how much they’ll be paid for their time.
4. Choose a guardian for your children.
This is probably the most emotionally jarring task in the process. You’ll need to determine who raises your children if you die. Find a relative or a trusted friend who’s willing to take on this task.
5. Talk to your heirs about what they want.
Dividing financial assets evenly is easy enough. But when it comes to family heirlooms, equal splits aren’t realistic. So discuss with your children and other heirs which of your belongings they want.
6. Store your will in an obvious place.
Be sure someone you trust knows the location of your will, along other documents. Put these papers in a safe at home, or in a safe deposit box that you share with a trusted person.
7. Review your will periodically.
Revisit this document every five to seven years. Be sure to adjust your will in the case of a marriage, divorce, birth or other major life event. The beneficiary designation on your individual retirement account supersedes your will, so be sure those are up to date.
Tip: Something is likely better than nothing.
If your situation is complex and you keep putting off estate planning, consider putting an online will in place to bridge the gap. This is particularly important if you have children. You can always update your will later.
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