What Should I Include in My Will?
There’s a lot to think about when preparing your will. Who will inherit your financial assets? If you have little kids, who should you designate as guardian? Who will deal with your business assets after you die? These are all important things to think about when you decide to create your will. But first, you should start by learning about the different types of wills and which one is the best fit for you.
Terms to Know
Before we dive in, here are some helpful terms to know and keep in mind:
- Testator: The person creating the will
- Executor: The person (or sometimes institution) you choose to be in charge of making sure that your will is carried out as written
- Estate: The sum of your assets, including property, possessions and money that you have at the time of your death
- Beneficiary: The person (or people) who will inherit your estate as listed in your will
- Bequest: A provision in your will that leaves property to a designated person
- Probate: The legal process your will goes through in court in the event of your death. During probate, the court examines, approves and enacts the terms of your will
- Trust: This is a legal arrangement where a third party, or trustee, hold onto assets on behalf of a beneficiary or beneficiaries
Types of Wills
When creating your will, what you include depends on the type of will you want. Anyone over the age of 18 and of sound mind can create a will.1 However, there are certain standards that are set for wills to be considered valid in a court of law, and these can vary by state. For this reason, you should consult with an estate planning attorney when creating your will.
While there are several different kinds of wills, we’ll outline the most common types.
Type 1: Simple Wills
This common type of will is, as its name states, pretty simple and straightforward. Simple wills are useful when all you need are instructions on how to divvy up uncomplicated assets from your estate to your beneficiaries. It must be put in writing, and typically typed up (as opposed to handwritten).
Type 2: Living Wills
A living will doesn’t distribute your assets in the event of your death. This type of will is meant to be used when you’re still alive – hence the name “living” will. It’s meant to outline the types of medical treatment you want to receive in case you’re unable to communicate your wishes yourself. For example, your living will may state whether or not you want to have a feeding tube or to be put on a respirator.
Type 3: Joint Wills
Similar to the format a simple will, joint wills are typically used by spouses who want to leave their estate to one another. For example, if you have a joint will with your spouse, your spouse will inherit your estate in the event of your death. Once your spouse passes away, the remaining estate will be distributed to the beneficiaries you two designated in your joint will.
Type 4: Oral Wills
Also known as a nuncupative will, oral wills are spoken to one or more witnesses before your death. But not all states recognize oral wills. In states that do recognize this type of will, courts usually require that you be in a state of danger or in a situation that makes you unable to create a written will. You may also be required to have one of the witnesses write your will down after your death. Oral wills can only distribute a small amount of property, so it’s usually best to use a written format for your will if you’re able to do so.2
Type 5: Testamentary Trust Wills
This type of will includes a trust that part of your estate will go to. Depending on the terms of your testamentary trust, your estate will be distributed to your beneficiaries gradually or under certain circumstances. For example, you may want a testamentary trust will if you have little kids that aren’t old enough to claim the funds from your life insurance policy in the event of your death. The funds can be put into the trust, and then given to your children when they’re old enough.
What to Include in a Will
Now that you’ve familiarized yourself with need-to-know-terms and the main types of wills, what should you include in yours? It depends on the assets you own and type of will you decide on, but here are some overall suggestions:
- The designated executor. You’ll definitely want to designate an executor. Typically, your spouse or a child (over the age of 18) would be a good person to assign. It’s also good to include an alternate executor, just in case your original pick is unable to carry out the duties of this role.
- Beneficiaries for specific property you own. Make sure to list your beneficiaries by name, and to update your will if your beneficiaries change. For example, if you welcome a new grandchild and want to include them in your inheritance, you need to add their name to your will.
- Beneficiaries for your life insurance policy. Even if you have your beneficiary listed on your life insurance policy, you may want to include it in your will as well. But make sure they match up, because the beneficiary listed on your life insurance policy will trump any policy beneficiaries listed in your will.
- Instructions on how to deal with your business assets. If you own a business, you may want to include specific directions on how you want your business assets dealt with in the event of your death.
- Guardianship for kids. If you have little kids, make sure to provide information on who you want to act as their legal guardian.
- Guardianship for pets. Although you can’t name your pet(s) as a beneficiary, you can provide instruction on how to take care of them and who should take care of them in the event of your death.
At the end of the day, there are several benefits to making your will. Whether it’s deciding to leave your favorite jewelry items to your grandkids or having your pets placed in the care of your sister-in-law, a will can help give you some peace of mind. When it comes to creating one, you should consult with an estate planning lawyer so you can rest assured that your assets will be in good hands in the event of your death.
1Legal Zoom. Web page: List of the Different Types of Wills. Retrieved January 24, 2019, from https://info.legalzoom.com/list-different-types-wills-4173.html
2Investopedia (June 14, 2018). Web page: Oral Will. Retrieved on January 24, 2019, from https://www.investopedia.com/terms/o/oral-will.asp