Many young couples and individuals with limited assets minimize the importance of making a will. Here are five reasons to create an estate plan regardless of your current net worth:
- Name a personal representative to distribute the assets of your estate and handle the affairs of your estate. Naming a personal representative in your will can help eliminate any conflict amongst family or friends who may vie for the role.
- Name a guardian for your children. Without a will naming a guardian, your family will have to make that decision with approval from the court. By identify the persons or persons whom you want to care for your children in the event of your death in your will, you can avoid conflict amongst family members and costly legal proceedings.
- Create a trust for your children. Without a will, the court will have to appoint a guardian to manage any assets inherited by your children if they are under age of 21. By creating a testamentary trust for the benefit of your children, you can name a trustee to handle the assets left to your children and place limits on when and how the assets are used.
- Give your assets to a charity or individuals who are outside your family. If you die without a will (or “intestate”), your assets will be distribute according to the laws of intestate succession to your spouse, children, or, if you are single and do not have children, to your parents and siblings. You cannot leave probate property to a life partner, close friend, or charity without making a will.
- Eliminate conflict and confusion for your loved ones. By deciding who you want to receive your property after your death and who you want to serve in certain fiduciary capacities (such as personal representative or guardian of minor children), and memorializing those wishes in a will, you can minimize emotionally and financially costly disagreements amongst your loved ones.