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What Exactly Is A Will And How Does It Work?

According to Investopedia:

A will is a legal document that states your wishes regarding the distribution of your estate and the care of any minor dependants. It is recommended that you use a will that is signed  and witnessed, so that your wishes are recognized in a court of law.

There are different types of wills, which include:

1. Testamentary or self-proving will is a written will that is signed in the front of witnesses.  It is the most common type of will and will generally hold up in court.

2. A Holographic will is a will that is NOT written or signed in front of witnesses and it rarely holds up in court.

3. An ORAL will is one that is spoken before witnesses but it also has a hard time holding up in a court of law.

Why do you need a Will? 

Creating a will gives you, rather than the courts, the ability to distribute your assets, including family heirlooms, according to your wishes. 

If you have minor children, a will lets you provide for their care. If you have children from a prior marriage, even if they are adults, your will can dictate the assets they receive. Creating a will also minimizes tensions among survivors. Relatives battling over your possessions can weaken what may have otherwise been a strong family.

If you are charitably inclined, a will lets you direct your assets to the charity of your choice. Likewise, if you wish to leave your assets to an institution or an organization, a will can see that your wishes are carried out.

Certain assets aren’t covered by a will, which include anything with a beneficiary designation.  This can include life insurance policies, retirement accounts, and annuities. 

What Happens if You don’t have a Will?

If you do not have a will, you die intestate. In such a case, the state will oversee the distribution of your assets. Contrary to popular opinion, the state does not inherit your assets, but rather distributes them according to a set formula.

The formula often results in half of your estate going to your spouse and the other half going to your children. Such a scenario can result in the sale of the family home or other assets, negatively affecting the surviving spouse. This can create financial and emotional difficulties, particularly if your spouse was counting on the bulk of your assets to maintain his or her standard of living. Further complications can arise if your children are minors, as the court will appoint a representative to look after their interests.

Setting Up a Will

One of the first steps is to list all of your important assets and determine who is going to receive them.  It is very important to include the distribution of personal items that may cause family divisions.  IF your estate is complex and you would like to provide some control over an asset upon distribution, then the services of an estate planning attorney should be employed.  You can do it yourself if your estate is simple and you feel comfortable, which can be completed with online documents.  One thing to make sure is the will is signed in the presence of witnesses, and should be notarized.

Changing Your Will

To change your will you can just rewrite the existing will or make an addition to your will known as a codicil.  It is important that you always have the changes witnessed and is done so when you are of sound mind.

Keep in mind Probate. 

If your estate value is above the state probate amount, even with a will assets can still be subject to probate, which can add additional expense and create unnecessary time delays.

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