Estate planning isn’t always top of mind. But it is something you should look into sooner than later, especially if you have children, want to specify who you’d like to leave gifts to, or wish to ensure part of your estate goes to a charity.
Writing your will is the best way to define who you want to leave your assets to. That way, when you die, your loved ones aren’t left scrambling to make those hard decisions on your behalf.
Even if you have an existing will, it’s crucial to keep it up to date as your life changes. But if you’ve never written a will, there are a few things you need to know.
What Is a Will?
A will is a legal document you use to distribute your assets, including belongings and property, after you die. It allows you to detail which family members, friends, or organizations you would like to leave specific property or dollar amounts to, which helps reduce some of the stress and uncertainty they may face after your death.
Parties in a Will
Multiple people need to be involved to create a valid will with the best chance of acceptance by a probate court (the legal body that oversees the payment of creditors and distribution of assets in the event of your death). The most common and crucial parties in a last will and testament include:
- A Testator. The testator is the person creating the will and whose assets the probate court will distribute upon their death.
- Beneficiaries. Beneficiaries are the people the testator names in a will to receive a gift from the estate — for example, property, money, stocks, or a specific item (like a car). Beneficiaries can be friends, family members, or even charitable organizations.
- Executor. The executor or personal representative in a will is responsible for distributing the testator’s assets to beneficiaries after the testator has died. Your executor needs to be of legal age, sound mind, ready and willing to be your executor, and have no criminal record. Typically, executors are close friends, family members, or estate attorneys. Your executor should be someone you trust and feel comfortable sharing your estate plans with, as it’s vital they’re not in the dark until after your death.
- Legal Guardians. If the testator has minor children or dependents, they can name a legal guardian in their will. The legal guardians are responsible for caring for the children until they reach legal age. If you don’t name a legal guardian in your will, a court will appoint one. Legal guardians are often the child’s other parent or family members like aunts, uncles, grandparents, or adult siblings.
- Trustee. Occasionally, testators and executors name others to manage specific assets for beneficiaries, especially when minor children are involved. For example, a testator may name a trustee to manage a business until the children come of age, at which point the trustee transfers the business to the intended beneficiaries.
- Witnesses. Witnesses are the individuals who review, witness, and sign a will to confirm the testator was of sound mind when they made the will, was not coerced or under duress when they signed it, and is actually the person who made and signed the document. To witness a will, you have to be of legal age, sound mind, and preferably have no personal interest in the will. If you choose to have your will notarized, at least one of your witnesses must sign it in front of a notary public.
How to Create a Will
To create a will, make a comprehensive list of your assets and debts. Include properties, bank accounts, vehicles, credit cards, loans, and any personal possessions of significant or sentimental value (like jewelry).
Your debts will affect your assets, so consider how that could influence the value and distribution of your estate.
For example, let’s say your home is worth $300,000 and you have $25,000 in your bank account. That means your assets add up to $325,000. But you also owe $10,000 in credit card debt and another $25,000 in student loans, totaling $35,000. You now subtract your debt from your assets to determine the value of your estate. In this example, your estate is worth $290,000.
Next, make a list of the people you would like to leave your assets to — for example, your children, grandchildren, friends, or even a preferred charity or nonprofit organization.
How you create your will can affect its validity and whether the probate court distributes your assets as you request. In most states, for your will to be valid, you must:
- Be of legal age in your state
- Be of sound mind
- Name an executor
- Have your signature witnessed or notarized by a notary public
- Clearly indicate that the document is your last will and testament
You also need to ensure you follow your state’s laws for estate distribution and inheritance. There are two primary categories of inheritance laws across the United States: common law and community property.
Common law is the most common inheritance law, with the majority of states practicing it. Common law means that when you die, your spouse is not automatically entitled to a share of your estate unless otherwise stated in your will. Instead, property is divided based on who owned or earned it, leaving open the possibility your spouse may not automatically get everything when you die without a will (intestate).
The rest of the states follow community property inheritance law, which means your spouse is automatically entitled to half the value of your estate accrued during the marriage. For example, properties you purchased or money you earned while married. You can choose to leave more than half of your estate to your spouse in your will, but no less than half. And if you have no will, there’s a possibility your spouse could get less than you intend.
Some states, like Alaska, Kentucky, and Tennessee, have their own specifications when it comes to community property.
If you die without a will, the court will distribute your assets to your spouse, children, siblings, or other descendants based on your marital status, living relatives, and state’s inheritance laws. The only way to override that is with a will.
If you aren’t familiar with your state’s inheritance laws, speak to a local attorney before creating your will.
There are three primary ways to go about creating your last will and testament.
1. Make Your Own Will
Your first option in making a will is to do it yourself. There’s no legal requirement that you hire an estate planning attorney to draft it. But you should only use this option if your estate plans are simple and straightforward and you have limited assets and personal property — for example, if your estate includes a single home, a savings account, and a vehicle and you want to leave it all to the same beneficiary.
You can create your own will by:
- Typing it out
- Writing it by hand
- Making a video
If you choose not to leave your will with an estate lawyer, let your executor know where they can find it upon your death if you haven’t already provided them with a copy. If your will is lost or hidden, it may prevent your personal representative from executing it as you request.
Note that you need to create your own affidavit of execution to strengthen your will. An affidavit of execution is a separate document that includes one of your witness’s signatures verifying they were present when you signed your will.
2. Use a Will Template
Another option is to use a simple last will and testament template provided through an online will-making service such as LegalZoom, Rocket Lawyer, and Trust & Will. These online services walk you through a step-by-step process to ensure your will is valid and includes the required information. Typically, you can customize these to your state.
Online wills can range anywhere from free to hundreds of dollars, depending on which service you choose and whether you have it reviewed by a lawyer or ask for legal advice through the platform.
As with a handwritten (or holographic) will, either give your executor a copy or let them know where they can find it so they can distribute your assets properly.
3. Hire an Estate Attorney
If you have numerous assets, beneficiaries, or believe someone may contest your will when you die, hiring an estate attorney to draft it is your best option.
For example, if you own multiple residential or commercial real estate properties, want to split your assets between numerous beneficiaries, or plan to leave a close relative out of your will.
An estate lawyer can help you create a will the probate court is most likely to distribute according to your final wishes. They can also provide any other supporting estate planning documents you need, like a living will, power of attorney, or living trust.
An estate attorney can also be beneficial when minor children are involved and you must name a guardian.
When to Update a Will
For your will to be relevant when you die, it needs to be kept up to date as you experience major life events. For example, you should update your will after:
- You Get Married: If you get married after making a will, you must update it to include your new spouse. That helps to ensure your estate transfers any assets you want to leave them upon your death. You can also make similar changes to include an unmarried life partner.
- You Get a Divorce: If you created a will when you were married and have since become divorced (or left a life partner), update your will to reflect any changes in assets you left to your ex-partner. If you don’t update or create a new will, your ex-spouse may inherit your assets instead of your preferred beneficiaries.
- You Give Birth to or Bury a Child: When you add a new child to your family, update your will. A new child includes biological children, grandchildren, siblings, nieces or nephews, and stepchildren or adopted children. Similarly, if your family loses a child, either through death or divorce, review your original will to determine whether you need to make changes. Updating your will ensures you include all your intended beneficiaries in your estate plans and exclude those you no longer want to benefit.
- A Beneficiary Dies: Whether your beneficiaries are friends or family members, you must update your will if one of them dies. For example, if your spouse was your primary beneficiary and they die before you, you must now transfer any assets you had planned to leave them to someone else.
- Your Executor Changes: Any time there are changes in who you would like to distribute your assets, update your will. Updates can become necessary due to deaths, broken relationships, or a change in your executor’s willingness or ability to manage and distribute your belongings when you die.
- Your Assets Change Significantly: If your financial situation experiences a drastic change, review your existing will. For example, if you gain or lose considerable assets, accrue a lot of debt, purchase or sell property, purchase or sell valuable investments, or close or start a business, it’s best to update your will.
- You Move to a Different State: Since estate laws vary by state, moving to another jurisdiction can impact your estate plans. If you move to a new state, update your will to ensure it reflects your new state’s inheritance and estate laws.
- You Move to a Different Country: If you move to a different country, you likely need to review and update your estate plans. Estate laws between countries vary significantly, and so do the way inheritances are taxed, distributed, and executed.
If you move to a different country than the one in which you created your initial will, consult an attorney to ensure it follows your new location’s laws.
How to Update a Will
You have two options when it comes to updating or changing your will. You can either use a codicil or revoke your old will and create a new one.
A codicil is a simple document you can attach to an existing will to make minor changes. For example, if you need to change a beneficiary, guardian, or executor. You can also use codicils to remove single clauses.
For your codicil to be valid, you must sign and date each change in the presence of a witness.
Revoking a Previous Will
When you plan to make significant changes to your entire will, it’s best to revoke your original last will and testament and create a new one. To properly revoke a will, you must:
- Include a dated statement in your new will revoking any previous versions or copies of your will as well as any codicils you made
- Retrieve and destroy any existing copies of your previous will from your executor, safety deposit box, or attorney
- Distribute copies of your new will to relevant parties, like your executor and attorney
If you don’t properly revoke your previous will, it can cause disputes among your beneficiaries, drawing out the distribution of your assets and causing family strain.
Review your new will with your executor and any relevant parties to ensure they understand the previous will is now invalid and are aware of the changes you’ve made.
Whether you want to ensure your children have a proper caregiver or your favorite charity receives a bequest from your estate, creating a will is the most effective way to direct the distribution of your assets and support your loved ones after you die.
If you don’t communicate about your intentions now, you may not have a chance to before the inevitable happens. Plan ahead and keep your will up to date to ensure your final wishes are valid, feasible, and relevant when you die.