3 Main Reasons to Make a Will
1. Direct Who Should Receive Your Property After Your Death
A will is a legal document that says what you want to happen to your property when you die. Your property may include your home, your cars, vacation property, personal property (such as clothing, jewelry, furniture etc.), boats, land and any other property which you own at death. In addition to physical possessions, your property includes financial assets such as stocks, bonds or retirement plans.
Most assets such as retirement accounts, stocks, bonds or mutual funds held with a financial institution have a beneficiary designation form for you to designate who should receive the proceeds of the account after your death. If you fill out this form, those assets will be distributed according to your instructions on the beneficiary designation form. If you don’t fill out a beneficiary designation form, these financial assets will be distributed along with the rest of your property under the terms of your will.
Any adult may make a will to express their wishes. In the legal field, we use the term “Testator” to refer to the person who has made a will. In the case of married couples, both the husband and the wife must execute separate wills. Even though married couples often own most assets jointly, they must each decide how they would like their interest in the property to be distributed. If you die without a will, your property will be distributed under your state’s laws of intestacy. The rules vary from state to state, but generally your property will go to your closest living relatives. How the state determine who get what among your closest living relatives varies according to your marital status, whether you died with living children, and other factors. For more on how the laws of intestacy work in Wisconsin and Minnesota, check out my blog post with a helpful chart for Wisconsin here and this post with links to relevant the state statutes.
2. Nominate a Personal Representative
In addition to providing for the disposition of your property upon your death, a will can also nominate someone to act as the manager of your estate upon your death. The person named is known as your “Personal Representative” and they are responsible for carrying out the wishes expressed in your will. Given the responsibility of this position, you should name someone you trust to accurately carry out your wishes to fill this role. Married people often name their spouse as their Personal Representative, with an alternate friend or relative named as a successor in case the spouse predeceases the testator.
3. Nominate a Guardian for Minor Children
For parents of minor children, your will can be used to nominate a “Guardian” for your children. The “Guardian” is the person legally responsible for raising your children in your absence. This is often a very important reason to execute a will. In the absence of a Guardian nominated in your will, the local court of jurisdiction would decide who would become the guardian of any minor children. The court would also appoint a “Property Guardian” or “Guardian of the Estate” to manage the inheritance of each minor child until they turn 18. This may or may not be the same person as the “Guardian” of the person of each child.
If you would like more information about planning for your estate, check out our brand new automated video tool which can help guide you through the process. This fun new tool lets you view a series of videos and answer short questions to help you get to the next step with your estate planning.