No one enjoys the chore of writing a will. Being confronted with the thought of your own mortality can be upsetting enough. However, the financial issues regarding what and how to provide for one’s successors are also troubling.
This is a particular difficulty for baby boomers. The youngest of the generation born between 1946 and 1964 are now 50 years old. This isn’t an ideal age to begin thinking about long-term financial planning.
Why Should You Make a Will?
You should write a will so that your heirs are cared for in an orderly, legal, and efficient manner, according to your instructions. Even though the procedure may appear intimidating, it does not have to be.
Most people don’t undertake estate planning because they don’t know an attorney and believe it’s too complicated. People should understand that it is not at all complicated. All that is needed is a recommendation for a lawyer who has already been referenced used by someone.
Making a will is a simple process: Just write down on paper how much money goes to each person. You can, for example, allocate 25% or 30% to each of your children and the balance to a nominated charity.
After you have completed this, you must acquire the signatures of witnesses, which is mostly a legal formality. The amount varies depending on where you live.
You will need to employ an attorney to fully execute a will that will not be disputed in court. T wo considerations should be taken into account:
Making out a will comes down to outlining the details of how much money someone will receive and how they will receive it. There are frequently particular considerations. If a child is involved, for example, you may not want to leave money to someone so young. In that instance, a trustee, perhaps one of the parents would be appointed until the child reached a specific, predetermined age.”
Why Should You Renew Your Will Every Few Years?
Reviewing wills is important for a variety of reasons, including a change in the amount of wealth to be passed. Maybe you might contemplate donations to charity or grandchildren or an adjustment to your quality of life.
If a youngster does not appear to handle finances responisbly or has a drug/alcohol habit, a trust might be required. Another case in point is if you have a special needs child or grandchild or a child’s marriage appears to be in jeopardy.
What You Should Know About Estate Tax Laws
Are you passing on your nest egg in the most tax-efficient way feasible, eliminating any tax liabilities on your loved ones so they get the majority of the money, not the government?
Estate taxes are no longer a major issue now that the exemption limit exceeds $5 million. As a result, if someone dies with an estate worth less than that amount, there will be no estate taxes due at all. If However, if their estate is worth more than $5 million, they should consult with an estate planning expert about strategies to reduce real-estate taxes.”
Americans Aren’t Ready
Despite the importance of writing a will, a 2010 Forbes article revealed that half of Americans at the time had not organized even the most basic estate-planning papers.
According to a national telephone study done by Harris Interactive for Lawyers.com many respondents who had not taken action were daunted by the legal costs and their own ignorance. Many respondents stated that they mistakenly felt that those without considerable fortunes didn’t need to plan.
Only 35% of those polled had a will that specified who would receive their money. Older American baby boomers were more likely to make plans; 77% of those over the age of 55 having signed at least one such paper, compared to 24% of those under the age of 35.
A psychologist could conclude that the majority of us are in denial, which is why we haven’t prepared financial planning for our heirs. But it’s more likely that we simply don’t want to confront the burden, which is reckless behavior. If you are on the younger end of the baby boomers generation, don’t be fooled into believing you have plenty of time to make a will. Life, as we have seen all too frequently, can end abruptly. It is wiser to be astute and take the initiative to draft a will. Do it for the sake of your heirs. They’ll appreciate it.