Photo by Melinda Gimpel on Unsplash

Many of you may have heard Aretha Franklin, left an ~$80 million estate and DID NOT leave a will. You also may recall Prince, died without a will, leaving behind a ~$200 million estate. And both of these singers’ estates will continue to earn royalty income for decades. It’s up to the court’s to decide who gets what.

In reality ~55% of people WHO NEED a will, DO NOT have one. Most of us do not want to think about or imagine our own death, but unlike returns on investments, our deaths are the one guaranteed thing.

YOU NEED A WILL, IF YOU:
• Married or Have A Significant Other
• Have Kids
• Have A Positive Net Worth (Assets – Liabilities)
• Care Who Inherits Your Assets

YOU DO NOT NEED A WILL, IF YOU ARE:
• Young, broke, single, and don’t have kids

A will is a legally binding document and despite so many movies staring a smart lawyer who easily corrects the wrong of your dear Papa, a properly prepared will is BINDING. An attorney prepares majority of wills, especially if you have some complexity in your estate.

Simultaneous to drafting your will, have your attorney draft your Living Will. A Living Will is a written statement detailing your desires regarding medical treatment in circumstances in which you are no longer able to express informed consent, especially an advance directive. The Living Will specifies your wishes and authorizes one or more people to make the tough decisions. One of the most painful decisions you or your love ones may have to make one day is to end the life support for someone you love and cherish. By taking the time to discuss your wants with your key family members and an attorney, you can reduce the burden on those who otherwise will be asked to decide.

There are numerous sources on the Internet to help you draft an inexpensive will or find an attorney. But if it is a relatively simple will, the cost of an attorney is minimal.

WHY YOU NEED A WILL

1. TOMORROW IS NOT PROMISED!

2. AVOID FAMILY FIGHTING:
Let’s be honest, some family members (you know which two I am talking about) will fight over that ugly rooster your Aunt gave you as a child. You know, the one your spouse has repeatedly tried to accidentally break. Clearly that thing was not made in China, as the vacuum just will not break it! List out by the individual’s full name or the organization, which gets your material possessions of value, including that butt ugly rooster.

3. FOR THOSE WITH CHILDREN – A WILL IS CRITICAL:
If both parents die, who will take care of your minor children? Who do you trust? Without a will, the court may appoint the brother in law you tried to beat with a bat! Or appoint a state guardian. By drafting a will you and your partner decide who is best fit to take care of your minor children.

4. AVOID LENGTHY PROBATE PROCESS:
It took over two years for the state to decide that Prince’s six siblings are entitled to his $200 million estate. {Prince had no spouse; no living parents and the State took two years to decide his six siblings get his estate. Do you want the state meddling in your affairs for two years?} Federal and state taxes will consume >50% of Prince’s estate (over $100 million). And the attorney fees for those two years as well as the State Appointed Executor will be significant ($ MILLIONS)!

All estates must go through the probate process, with or without a will. However having a will significantly speeds up the probate process and reduces cost. Probate courts serve the purpose of “administering your estate”, and when you die without a will (known as dying “intestate”), the court will decide how to divide your estate without your input, resulting in long, costly, unnecessary delays.

5. MINIMIZE ESTATE FEDERAL AND STATE TAXES:
I have paid enough taxes over my lifetime and have no desire to leave any more than legally required to my wasteful state or the Federal government! A will helps you to minimize those pesky estate federal and state taxes. The value of what you give away to family members or charity reduces the value of your estate when it’s time to pay estate taxes. Prince’s estate could have significantly reduced that $100 million tax bill!

6. YOU SELECT YOUR EXECUTOR – WHO YOU TRUST:
Executors make sure all your affairs are in order, including paying off bills, canceling your credit cards, and notifying the bank and other business establishments. Because executors play the biggest role in the administration of your estate, you want to appoint someone who is honest, trustworthy, and organized. This does not have to be a family member. Pick someone competent to do the job. Without a will, the state selects your executor. I don’t know about you, but I DO NOT WANT THE GOVERNMENT, selecting my executor. Look at how many states are broke!

7. DISINHERIT PEOLE WHO WOULD OTHERWISE STAND TO INHEIRT IF YOU DO NOT HAVE A WILL:
Obviously, you love and adore every relative you have, including your ex husband or wife. Right? Without a legally binding will, sometimes that ex-spouse, who you tried to put a contract on, can inherit!
Specifically list who inherits in your will. Forty-five relatives came forward to put a claim on Prince’s estate. I have no idea how he felt about his six siblings, but the judge ruled an equal split.
Also be sure to change all beneficiaries for your 401, IRA, insurance policies (any and all documents that ask for a beneficiary). Again, if you recently divorced do you want your ex-spouse to get your HARD EARNED MONEY?

8. MAKE GIFTS AND DONATIONS:
If you routinely give to certain organizations, you may want to include those in your will. Designate your gifts to your church, favorite charities, Styron Powers (hey-I had to try!) reflecting YOUR personal values and wishes.

9. WILLS ARE NOT WRITTEN IN STONE-YOU CAN CHANGE YOUR MIND:
Our lives change. Maybe you have another child, new grandchild, or marry three men (just checking who reads to the end). Make as many changes as you desire to stay current with your life. Well within reason, as your attorney does absolutely NOTHING for free!

CONCLUSION

Do you have a will and Living Will? Is it updated? Writing your will forces you to make the above listed decisions. Many tough decisions, such as which relative you want to raise your children. Maybe you have a special needs child that will require more of your estate. And if you need an attorney, ask friends, co-workers, etc who they used to draft their will. STOP procrastinating and get to work! This is one document, I hope you prepare, but will not need for a VERY LONG TIME!!

DISCLAIMER
I am a proud nerd (my beautiful wife and daughter told me so) investment and finance blogger, with a Rutgers, MBA and Harvard, Advanced Management. I am a successful investor in equities and real estate and happy to share my personal finance and investment lessons learned with you. I am NOT however, a licensed financial advisor. Please do not construe my suggestions on this blog, as recommendations for your personal situation. For individual finance advice please seek your own licensed CPA or financial advisors.