With everything going on in the world people are now afraid of death more than in recent years. This is one of the most delicate topics to bring up. It is rare to find anyone who is neutral much less eager to bring up death. It was a little hard for me to bring up in a previous post that brought up life insurance. In this post I will lean out of the comfort zone for most people and explain the steps needed in making a will.
When You Do Not Need A Will
Lack Of Wealth
One of the hardest things people need to address before writing a will is if you have wealth to give to your kin. Considering the fact that 70% of Americans have less than $1,000 in savings BEFORE THE PANDEMIC, some, if not even most people, do not have any wealth to give to their kin. Or at least not that would be consumed almost instantly by legal fees.
If you do not have any wealth to give to your kin you must instead start to build your savings or look into assets. Then you can start to think of how you leave your wealth. But do note, not every will requires a lawyer to draft it.
Right Of Survivorship & Beneficiaries
While making a will can help to guarantee your wealth is passed on there are many other simple ways. For instance, joint bank accounts are among the best tools to ensure the people you care for get money after you die. Joint bank accounts are owned by more than one person and the right to survivorship makes inheritance simple in your passing. The right to survivorship states that if one owner passes, the account is then owned by the other owners. Almost as if nothing happened.
Liquid assets work in a very similar way. Most brokerage accounts allow the assignment of beneficiaries. Vanguard, Fidelity, and my 401k allowed me to assign beneficiaries so I imagine that every large brokerage firm allows this to a certain degree. The concept is pretty similar to a joint account. In the event of your passing the account becomes the beneficiary’s. However, the matter may be complicated because the account may be exclusively in your name and need to change ownership.
I personally recommend setting up accounts with joint ownership with any and all of your beneficiaries. Then from your passing there will be next to no complication your beneficiaries will have in addition to the grieving of your death.
Non-liquid Assets And Items
The time making a will may be necessary is with non-liquid assets. Unfortunately, non-liquid assets cannot be split easily. Liquid assets are usually numbers which division was literally “designed” from. You cannot split a house 50/50 much less in any other complicated division. That is where making a will is necessary.
Sometimes inheritance of a house is simple. Your beneficiaries could have their names on the deed. Having more than one name on a deed is similar to having a joint bank account. Everyone who signed the ownership portion of the deed owns the house. If your beneficiaries names are on the deed, there will be little complication.
If only life was that simple. Many people marry and move into houses already owned. Sometimes the initial owner does not think about added their beneficiaries’ names to the deed much less set up the legal actions to do so. Most people would not even think about adding their children to their deeds.
How To Make A Will Considering A House
When you are making a will, you must consider who you want to have the house. Traditionally many people would give it to their spouse. What if you have parents or children to worry about too? Inheritance of a house is complicated even in a traditional family. Let’s go over the easiest part. If you are worried about your spouse sharing the house with your child(ren) they are legally required to care for the child until they come of age (usually 18) if they have custody.
If there are any questions for custody, it is likely you need a will. For instance, if you have remarried and your current spouse is not the biological parent of your children, you need to make sure custody states your new spouse is responsible for caring for your children. If custody is in question, so is the fact that your children can live in the same house as your current spouse.
As for parents, there are laws called filial laws that are implemented by most states that enforce the care of parents via children. These laws are very tricky. While it seems clear that children raised under parents fall under these laws, I am not sure about children who married into the family. You should definitely consult a legal expert about this. I am not a legal expert, but generally speaking these are the conditions for filial laws to be enforced:
- Your parent received benefits from the state government.
- Your parent has received a medical or nursing home bill from a state with a filial responsibility law that they cannot pay.
- Cost of care for your parents exceeds Social Security benefits.
- Your parent does not qualify for Medicaid.
- Your parent’s caregiver believes the you have money to pay the bills.
- The parent never abandoned you for any long period of time while you are under 18.
I am sure these laws provide lawyers with much to do. It may be simpler just to establish in your will who will care for your parents if they are ever in need just so there is no legal trouble.
You have worked hard to make your business what it is. I hate to say this, but there is a very good chance there is no one you love who will be as ready or as passionate to take on your business. With that in mind should you try to give the business to someone else and maybe have your beneficiaries receive some benefit from it? Should you just leave them out of it altogether? These are many of the tough questions you should ask.
If you have a business, not only did you have an idea to help improve the world, but potentially employees. You cannot leave both of those to anyone who has no desire to carry out your idea. You can still give your beneficiaries some equity without making them the head of the companies. The successor to run your business should be competent. Unfortunately, there is no solid advice I can give for this situation because I know nothing about this personally and every situation is different.
Forging your wealth through your life is very difficult, but at least you can adapt with every breath you take. When you take your final breath you have no control of your wealth any more. That is why making a will and setting up your beneficiaries is important. The world is crazy right now, which is all the more reason to make a will right now if you intend to pass on any of your wealth.