The biggest mistake when it comes to wills is not having one at all.
That’s bad news for the 58 percent of Americans who don’t have a will or any other end-of-life plan, according to a recent Caring.com survey. The figure is even higher for those with children. A whopping 64 percent of those with children under 18 don’t have a will, according to the survey.
One of the most common reasons why survey respondents said they didn’t have a will? “I just haven’t gotten around to it.”
Katie Roper, a mother of two and Caring.com vice president, said she wasn’t surprised by the reason, but was shocked so many people with young children are procrastinating on this important task.
“To complete a will, you have to take an hour or two of your time,” Roper said. If you don’t take that time, it could mean “hundreds of hours and thousands of dollars in legal fees trying to get everything sorted out,” for those you leave behind.
If you are one of those Americans without a will, make this year the year you vow to make it happen. Here are five things you should know to get you started.
1. What Happens if You Don’t Have a Will?
If you don’t have a will or any other end-of-life plan when you die, you’ll become what’s known in legal terms as intestate, and a court will go through an often lengthy legal process to determine your rightful heirs.
“If you don’t do anything, the state that you’re living in has a will waiting for you,” said Danielle Mayoras, an estate planning attorney who documented several celebrity estate conflicts in the book, Trial and Heirs: Famous Fortune Fights. “And your assets may go to someone you don’t want.”
Each state has their own “statutory will” that decides who gets what when it comes to your assets. And, of course at this point, you’d have no say in it.
2. Will or Living Trust?
When preparing your end-of-life plan, you will likely choose between a will and a living trust.
People with more complicated financial assets may be more inclined to spend the time and additional money to create a living trust, but it’s a good idea to talk to a lawyer to decide which is right for you, Mayoras said.
If you have a standard will, you, “the grantor,” designate an “executor,” someone who will have legal responsibility to carry out your will’s instructions. That person will be responsible for filing your will with probate court—the court that deals in the administration of estates—and managing your assets during the probate process.
This process can be quite lengthy, and include a number of fees.
One major benefit of a living trust is that it can allow your heirs to avoid probate court, because your assets would be transferred into the ownership of a trust. Instead of appointing an executor, you would appoint a “successor trustee” to head the trust after your passing.
Additionally, a living trust may provide more privacy. Typically, once a will enters a probate court, it becomes a public document. That means anyone can request to see it. A living trust is generally shielded from such requests, except in cases of litigation, according to Bankrate.com.
In either case, it’s a good idea to make sure the person whom you designate as either your executor or successor trustee is aware you chose them and is comfortable with legal paperwork, Caring.com’s Roper said.
3. To Hire an Attorney or Not?
You are not required to hire a lawyer to draft a will, but it may be a good idea to ensure that the document is valid.
There are plenty of online services that provide state-specific forms to draft a will. Roper said that’s better than nothing. Even if you draft the will yourself, she suggests a lawyer at least look over the paperwork.
If you can, you want to avoid any situation that would elongate the probate process for your beneficiaries. While having no will at all would do just that, unclear language could also prolong the process.
And don’t forget to let your heirs know where to find the paperwork.
“It’s no good giving that to a lawyer if your sisters or brothers don’t know the name of the lawyer,” she said.
4. What is a “Valid” Will?
Each state has different requirements for a valid will. Some states may require two witnesses instead of one, or may require a will be notarized or filed with the court.
For example, in Colorado, a will must have two witnesses who are “uninterested” parties, that is, people who will not benefit from the will, or it must be notarized, according to the Colorado Bar Association. Meanwhile, in New York, the will must be filed in surrogate court, unless an individual has less than $30,000 of personal property, according to the state’s court system.
While you can contact your local probate court for information on the requirements in your state, you may also want to consult an attorney, Roper and Mayoras said.
You also want to make sure you update your will after important life events, such as the birth of a child or the purchase of a new home.
5. Individual vs. Joint Will?
You may think that sharing large assets with your spouse means you should have a joint will. But Mayoras and other estate planning lawyers often recommend an individual will, instead.
Typically, a joint will bequeaths all of a couple’s assets to the surviving spouse, and then provides for all of those assets to then go to the children upon the death of the second spouse, which seems in line with what may couples may want.
However, most joint wills also contain a provision that neither spouse can change or revoke the will alone. That may cause problems for the surviving spouse down the line, as it may restrict the surviving spouse from selling the family home or any other assets covered by the will.
“One of the benefits of estate planning is control,” she said, “and the use of a joint will limits the control that each party can exercise individually.”