Essential Estate Planning: Crafting Your Will for a Secure Future
Estate planning is a necessary part of middle age, and your will is one of the most important parts of the plan. If you die without one, state law will determine how your assets get distributed, and there could be consequences for your minor children. A properly executed will ensure that your wishes will be followed after you pass. Your estate planning should cover everything you want to happen with your assets, your minor children and even your pets after you pass.
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Executor
The executor, or personal representative, is the person who manages your affairs and carries out the instructions in your will on behalf of your estate and your heirs. In addition to paying debt and taxes from your estate’s funds, the executor oversees asset distribution and other functions of the will. You can use the will to appoint a person you trust for this role.
Your will should give the executor permission to access your online accounts, and provide the username and password for each account you want them to be able to access. Otherwise, state law and the accounts’ terms of service might prohibit your executor from accessing the accounts, according to the American Bar Association.
If you want to restrict access – to your social media accounts, for example – specify that in your will as well.
Guardian for Minor Children
If you have minor children, designating a physical guardian gives you a say in who provides for their care if your death leaves them without a surviving parent, whether because you’re their only parent or you and your partner die at the same time. You can also appoint a property guardian, which can be a different person, to manage your children’s finances.
Although the judge will appoint your children’s guardian, most judges follow the parents’ wishes, according to the legal website Nolo.
List of Assets
Your will determines how your assets are distributed, so it’s a good idea to list them individually unless you want your entire estate to go to one person. Include real estate, cash, cryptocurrency, insurance policies, bank and investment accounts and personal belongings you own individually. Exclude “pay-on-death” and “transfer-on-death” assets for which you’ve already named a beneficiary.
If you want certain assets to be sold, specify that in the will.
Bequests
You bequeath assets by naming each beneficiary you want to gift assets to and describing the assets you want each to receive. The beneficiaries don’t have to be people. You can bequeath to charities, for example.
Consider naming alternate beneficiaries in case a designated beneficiary dies before you do.
Pet Guardian
If you have one or more pets, it’s a good idea to appoint a guardian for them in your will. This person becomes a beneficiary, according to FindLaw, so you can also bequeath them money or other assets to offset the cost of the pets’ care.
The ASPCA recommends making an informal agreement with the caretaker ahead of time to prevent any question over who will care for the pet while your will is in probate.
Residuary Clause
Some property, such as personal effects with little monetary value, might remain after the bills and taxes have been paid and assets have been distributed to beneficiaries. These remaining items are called the residuary estate, and you can designate one or more beneficiaries to receive it. Alternatively, your will can direct the executor to dispose of the items.
Legacy Letter
A legacy letter is a personal letter you write to your heirs to share anything you want them to know after you pass. You can use it to express your love and affection, offer consolation, reminisce about special times or pass along wisdom you acquired during your lifetime. Although it’s not part of the will and is not a legal document, the letter can also specify how you want your funeral to be handled if you haven’t already expressed your wishes in a healthcare directive or other document.
As Susan Hirshman, director of wealth management at Schwab, wrote in a blog post on the brokerage website, such a letter can help ease the emotional burden of your passing.
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