If you haven’t written a will or named beneficiaries on your financial accounts, you should do this immediately. It’s one of the smartest ways to save money and ensure your loved ones are taken care of after you’re gone. Here’s why it’s important and how to get started.
Why You Need a Will
Writing your own will helps you decide who gets your belongings, like your house, car, and savings. Without a will, the state decides who gets what, which can be a long and expensive process. Lawyers and courts get involved, which can cost a lot and take months or even years to sort out.
Websites for Making a Will:
- FreeWill: A free, easy-to-use online tool that helps you create a legal will in minutes.
- DoYourOwnWill.com: Another free site that provides templates and guidance.
- Rocket Lawyer: Offers a free trial and detailed instructions for creating your will.
What to Include in Your Will
Do Include:
- Personal Information: Your name, address, and date of birth.
- Executor: The person who will carry out your wishes. Choose someone you trust.
- Beneficiaries: The people who will inherit your assets.
- Guardians: If you have minor children, name who will take care of them.
- Assets and Debts: List your property, bank accounts, and any debts you have.
Don’t Include:
- Funeral Instructions: These should be communicated separately, as the will might not be read until after the funeral.
- Jointly Owned Property: If you own property with someone else, it usually passes to the co-owner automatically.
Naming Beneficiaries on Financial Accounts
By naming beneficiaries, you ensure that money in accounts like your retirement plan, life insurance, and bank accounts goes directly to your loved ones without going through probate. This process is faster and avoids legal fees.
How to Add Beneficiaries:
- Retirement Accounts (401(k), IRA): Contact your plan administrator or log in to your account online and follow the instructions to add beneficiaries.
- Life Insurance: Contact your insurance company to update your beneficiary information.
- Bank Accounts: Ask your bank about setting up a Payable on Death (POD) account. This means the money goes directly to your named person when you pass away.
Types of Beneficiaries
Primary Beneficiary: The first person or entity to receive your assets. This could be a spouse, child, or charity.
Contingent Beneficiary: If the primary beneficiary cannot inherit (for example, if they pass away before you), the contingent beneficiary gets the assets.
Payable on Death (POD): For bank accounts, you can name someone to receive the money directly upon your death without going through probate.
Tips and Tricks
- Review Regularly: Check your will and beneficiary designations every few years or after major life events like marriage, divorce, or the birth of a child.
- Communicate: Make sure your executor and beneficiaries know about your plans and where to find important documents.
- Seek Professional Advice: While you can do a lot yourself, it’s sometimes helpful to get advice from a lawyer, especially if you have a large or complex estate.
Act Now
Don’t wait to get your affairs in order. Writing a will and naming beneficiaries is simple, and it can save your family time, money, and stress. If you haven’t done this yet, make it a priority today. By taking these steps, you ensure that your wishes are respected and that your loved ones are taken care of without unnecessary hassle and expense.
Remember, planning ahead isn’t just smart; it’s a gift to your family. Take action now to secure their future.