Why You Need a Will
Given that we are in the month of September, which is typically a month when people deal with things they’ve avoided over the summer months (or longer), this article will discuss why it is important to have a will.
The idea of creating a will might seem silly or morbid. However, dying without a will can create extra, unnecessary grief for the loved ones that you leave behind.
If you die without a will, your property and assets will be distributed according the Estate Administration Act, but this should not be used as an excuse for not having a will. The Estate Administration Act provides that if you have a spouse, but no children, your spouse will receive your entire estate. If you have a spouse and children, your spouse receives the first $65,000 of your estate and the remainder is split between the children and your spouse, in a proportion depending on how many children there are. But, if your children are minors, a government agency will assume responsibility for managing about 1/2 to 2/3 of your assets on behalf of your children and your spouse will have no control. If you have no spouse or children, your estate will be transferred to your parents, your siblings or your next closest family members. Your friends, distant relatives or any charities will receive nothing from your estate.
In other words, dying without a will takes away all the control over how your estate is divided and neither you, nor your loved ones, will have any say over how or when your estate is distributed.
Dying without a will almost always will result in missed income tax and probate fee savings and increased costs to your estate, because it will have to pay for lawyers and other professionals to administer it.
For those of you with children, you need to have a will to appoint a guardian to care for them until they are adults. Failure to appoint a guardian for your children could result in a court fight over who cares for them, or they may end up in government care. Feel bad yet? There’s more. If you die without a will, a government agency will manage your minor children’s inheritance until they turn 19, when they will get their inheritance outright. Remember how bad you were with money when you were 19?
To be sure that your will is effective and means what you think it means, you should hire a lawyer to do your will. If you don’t want to spend the money to have a qualified professional prepare your will, you should consider that any money you save now by doing a will yourself will likely be spent by your estate many times over dealing with a will that was not drafted or executed properly. Further, a professionally prepared will helps minimize a court challenge to your will after you pass away.
When you do get your will done, you should revisit it if there are any significant changes in your life (for example, children, grandchildren, changes in your health or a dramatic increase or decrease in your net wealth). In addition, it is also a good idea to review your will every three to five years even if not much has changed in your life.
There are two other major events that should cause you to review or re-do you will: marriage or separation. A little known fact is that unless a will was prepared in contemplation of marriage, marriage invalidates your will. So if you have been married since you made a will, you don’t really have a will and you should immediately do a new one. Finally, if you have just separated from your spouse, and you do not want him or her to receive any of your estate, you should immediately do a will. Until you are separated for one year or divorced, your spouse will inherit your estate according to the Estate Administration Act if you do not have a will, or if you have a will, according to that will.