Why now is the time to write your will

Text size: aA aA aA
Your family will thank you for putting your wishes on paper. Here's how to get started.

Key points

  • The purpose of a will is to ensure that your assets are disposed of in accordance with your wishes when you die
  • If you die without a will, the state — not you — will decide what happens to your assets and belongings
  • A will can help protect your family from taxes, legal fees and discord
  • Related content: Read the Estate Planning Checklist
Here's a shocker: More than half of Americans don't have a will — including nearly a third of those 65 and older, according to a 2016 Gallup research poll.Footnote 1 One possible reason: "People don't like to plan for their own mortality," says Jean Kim-Wall, Managing Director and Wealth Strategist at Merrill.
A will ensures that your assets are disposed of in accordance with your wishes when you die. You may also want to consider having an estate plan in place (which includes a will). Estate plans are less about your own future than they are about protecting your family — from discord, avoidable taxes and legal fees. Most importantly, creating your own estate plan gives you control. "If you don't have one, the state will decide how your estate is handled," Kim-Wall says.
"Whether you're nearing retirement or just starting a family, it's a good idea to put your wishes down in writing," she adds. A good place to start is by assessing your net worth with the Net Worth Estimator™. Then you'll want to consider your goals. "Think about how you want to pass on your legacy," she suggests. "An estate planning attorney can help you fine-tune your initial thoughts and make everything official by drafting the necessary documents." And bring your family into the conversation as well, to make sure they understand your wishes and how you'd like them carried out.
A will can help you avoid...
Court costs
Depending on state law, probate and filing costs could erode your estate's value if you have no will.
Family conflict
Without a will in place, your heirs are left to vie for favorite heirlooms and possessions.
Emotional pain
Tracking down assets and records is a tremendous time commitment for your mourning family.
According to Kim-Wall, every estate plan should address these three things:

Your heirs — and their inheritance

Naming who inherits what from your estate is the first step. And while dividing up your financial assets is important, also think about whether you have any personal belongings that you'd like specific people to have. These may be heirlooms of sentimental value or a beloved collection. Don't forget that estate planning in a digital world means that you might have things like videos and photos on your personal computer or mobile phone that your family might like to have — so be sure to determine who will get access to your passwords.
You'll also have to consider the ways in which your assets are passed on, whether it's directly to your heirs or via a trust. Any assets you leave directly to heirs can be used or spent at their discretion, whenever they choose. A trust, on the other hand, allows you to set rules for how and when any assets you leave might be disbursed. This is particularly useful if you're leaving assets to minors or to someone who is not able to manage their own finances, perhaps because of a disability.
Another situation where a trust could help is if you've remarried later in life and are wondering about how to care for your current spouse while also leaving enough for children from an earlier relationship. Trusts can be drafted to be very flexible: for example, you may allow your current spouse to receive an income while protecting what's left for your children. (You can find more ideas for protecting your assets and those you love, by reading "Protect your assets with a trust" and "Revisit your estate plan.")
A will can always be updated as circumstances change, and it's far better to have a will that's suitable for your current situation than to have no will at all.

Who will make sure your wishes are carried out?

The executor of your estate will act as a sort of administrator for everything you leave behind. "The executor will take inventory of your assets, pay any outstanding bills, settle your affairs, make sure your mandatory filings are done and pay any estate taxes that may be due," says Kim-Wall — so select someone you trust who would be good at those things. "People will often name a family member or a trusted friend," she adds, "but if you have complex assets or family dynamics, it makes sense to consider a corporate fiduciary to handle these matters." (A corporate fiduciary is an organization that's entrusted with the job of managing your financial affairs.)
If you have minor children, you'll also need to name a guardian or guardians — the person who would look after them if you and their other legal parent were both to die. Even though it's a remote possibility, you'll want to check with this person first, because it's an awesome responsibility. For a first-person account of why this is so important, read "The Things They Never Tell First-Time Parents."

What happens if things change

Wills can become outdated quickly, so try to make sure yours spells out how you want to account for major life events like births, deaths, marriages and divorces. But whatever you do, don't let the complexity of thinking through multiple hypothetical events discourage you from making a will in the first place. A will can always be updated as circumstances change, and it's far better to have one that's suitable for your current situation than to have no will at all. "This is one circumstance where 'good enough' is not so bad, because it's still much better than having nothing in place," says Kim-Wall. You'll want to take a look at your will every few years anyway, to make sure it accurately reflects your wishes and the latest circumstances of your life.
For more tips on getting started, check out "What You Need to Know About Your Will."
Next steps

Footnote 1 "Majority in U.S. Do Not Have a Will," Gallup, May 2016, http://www.gallup.com/poll/191651/majority-not.aspx

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.