Will Planning Checklist: What to Include in a Will - Adviser Investments

Will Planning Checklist: What to Include in a Will

April 26, 2022

Every adult—young and old—needs a legal will. This is as true for unmarried couples as it is for families with young children. A will is an opportunity to express your final wishes, support loved ones and continue your legacy after your death.

What Is a Will?

Before reviewing what to include in a will, let’s clarify what a will is and why you need one.

A will is a legal document (aka last will and testament) specifying what you want to happen with your assets and other possessions after you die. It’s also used to name guardians of minor children.

Without a valid will, a probate court determines your children’s guardian and who your heirs are, i.e., who receives your money. This process is known as intestate succession, and should be avoided.


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What to Include in a Will

There are many components to creating a legal will, including:

Name an Estate Executor: An estate executor, personal representative (or trustee for trusts) is responsible for administering your estate after your death.

Identify Primary Beneficiaries: A primary beneficiary is a person, organization or trust who is first in line to receive your estate’s assets and other possessions. Anyone can be a beneficiary, not just family. It’s also important to include contingent beneficiaries in the event of a primary beneficiary’s death.

List Assets & Possessions: Certain assets require named beneficiaries and transfer directly to those beneficiaries upon your death—think life insurance policies and retirement accounts. They don’t need to be listed in your will. However, you may have other assets, like a boat, property or wedding ring you’ll want to address in your will.

Consider a Testamentary Trust: If you have young children, then establishing a testamentary trust within your will is helpful for creating asset distribution parameters. For example, if your children are ages 18 and 20, you may not want them to receive their inheritance all at once, since they’re so young. Instead, you could distribute a portion of their inheritance every five years, at a specified age, or after a specific milestone like college graduation or marriage.

Establish a Living Trust: Many individuals and families benefit from creating a living trust—a wealth management planning tool used to transfer assets to beneficiaries and avoid the probate process. It’s not required for legal wills; however, we encourage you to consider one. To understand key benefits, read our post: Four Advantages of Trusts.

What do I include in a will?

Note: It’s also important to name individuals you don’t want as guardians for your children, including an explanation about why you think they would be unfit.

Also, if you intend to exclude immediate next of kin from an inheritance, acknowledge them in your will. If you don’t, it could be argued in court that you inadvertently forgot about them. An alternative is to leave them a small gift, making it clear to a probate judge you’ve expressly acknowledged this individual to the extent you were comfortable with.


RELATED: For straightforward financial advice from our experts, subscribe to The Adviser You Can Talk To podcast. Also, receive bi-weekly market trends and analysis of critical investment topics via your inbox when you sign up for our Adviser Fund Update newsletter.


A Will Is Critical for Unmarried Couples

According to Pew Research, it’s now more common to cohabit than to marry. In fact, among adults ages 18 to 44, nearly 60% have lived with an unmarried partner at some point in their lives.

However, unmarried couples generally do not share the same legal benefits as married couples—probate courts don’t consider unmarried life partners next of kin and are not automatic beneficiaries of their partner’s estate.

The solution is to include your life partner in your will and other estate-planning documents, like your medical power of attorney.

How Long Does It Take to Create a Will?

The time it takes to create a will varies and depends on the intricacy of your estate. Generally, the more complex it is, the longer it takes.

For example, if you own a business or have children from two marriages, additional planning time is needed to ensure the best outcomes for all parties.

Of course, some delays are easily avoidable simply by remaining organized. For instance, it’s advisable to answer your estate planning attorney’s questions promptly.

When to Update Your Will

You should review your will annually and after a major life event, including:

  • Beneficiary, Guardian or Spousal Death
  • Divorce
  • Birth (e.g., adoption, second child or grandchild)
  • Home Purchase or Sale
  • Inheritance or Windfall
  • New Job
  • Tax Law Changes

Next Steps

Creating a will is just one step in coordinating a comprehensive estate plan. For most families, a will is not enough to ensure your assets transfer easily to beneficiaries in a tax-efficient way.

Therefore, we encourage you to hire an estate attorney to ensure your estate plan is comprehensive. Find a good fit by listening to our recent podcast: 5 Key Questions: Finding the Right Estate Attorney for YOU.

Contact Adviser Investments anytime for assistance. We pride ourselves on being The Planner You Can Talk To.


RELATED: Estate Planning Checklist: Must-Haves Before You Die


 


Tax and legal information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice.  Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice. Always consult a licensed attorney or tax professional regarding your specific legal or tax situation.

Our statements and opinions are subject to change without notice.  All investments carry risk of loss and there is no guarantee that investment objectives will be achieved.

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