Estate Planning can be confusing, but when you understand the different components of your plan and why they are necessary, it suddenly becomes a lot easier to manage. If you have not yet started any part of your Estate Plan, but you’ve been thinking about taking that first step, Trust & Will is here to help.
The easiest and most effective way to get a plan in place is to simply start with a Will. Read on to learn:
Most Important Assets to Include in Your Will
While there are many different pieces to an Estate Plan - from Guardianship to Trusts to Power of Attorney (POA) and more, many people find that starting with a Will is an easy way to begin the process. But before you even do that, gathering a list of assets for your Will is a great first step. Knowing what you have can help you make your decisions while ensuring you don’t inadvertently miss anything.
This might be the most important part of your Will. It means your loved ones know exactly where you have money set aside for any outstanding debts. These could include end-of-life care, medical or funeral expenses as well as, if there are any, probate costs. Of course these types of debts could all be taken care of with money in your estate, but you make it a little easier on your loved ones when you clearly identify where and how they can access specific funds for certain things.
You’ll also want to list various bank accounts: checking, savings and money market accounts are all common types of cash assets that you could list in your Will.
*Note that any account you have set up as Payable on Death (POD) or Transfer on Death (TOD) would not need to be included in your Will. More on these types of accounts when we discuss what you should never put in a Will below.
Real estate can come in many forms - from homes to land to property to buildings, and your Will should make it very clear who gets which properties. If you have a mortgage on any property, think about how that debt would be paid off.
Will there be life insurance proceeds that could be put towards a mortgage?
Would any properties need to be sold?
Do you have joint tenancy and if so, does your state allow for the right of survivorship?
All of these things need to be considered to create a comprehensive Estate Plan that makes things easier on your loved ones.
Your investments in stocks and bonds, as well as any mutual funds that aren’t in a Retirement Plan like an IRA, 401(k), etc., should be included in your Will along with beneficiaries for each. This way, you leave no question about who gets what from your investments.
Whether you have ownership in a large corporation, or you run a small side hustle out of your home, you should include any business interests in your Will. Making sure you have a clearly defined succession plan can help avoid a lot of confusion and stress. By designating somebody to take over your interest in a business, you’re setting up a smooth transition in ownership.
Be sure you understand how your business was established and review your original documents to see if you included any instructions about what should happen upon your passing. You may have set up specific directions, such as the business should automatically go to a spouse, business partner or anyone else. Or maybe you established that the business should be dissolved if you pass away. When you’re creating your Will, it's a good time to make sure that any original direction is still in line with your wishes.
There are generally smaller assets, often those that have sentimental value, that you would want to leave to individual family members and friends. Think: jewelry, cars, family heirlooms, art or other collections, etc. If there’s something special you know you want to leave to a specific individual in your life, your Will is a great place to do so.
No, guardianship is not considered an asset, but a huge part of why we create a Will is to take care of those who are most vulnerable in our life. Appointing guardianship for pets, minors or others you are responsible for is one way you can ensure that they’ll be fully cared for and protected when you can no longer do so yourself.
Remember, you can handle guardianship within your Will directly. Trust & Will is here to help you with all of your guardianship questions and needs.
What NOT to Include in a Will
We’ve covered a lot of what should go into your Will, but have you thought about what you should never put in a Will? Believe it or not, there are actually a few things that would fall into this category.
Property listed in a Living Trust - If you have created a Living Trust, and you have included property within that Trust, you have already set up everything you need to pass that property on upon your passing.
Joint tenancy property - Because you own it with someone else, properties titled as joint tenancy should not be included in your Will.
Retirement plans - 401(k)s and pensions or IRAs already include beneficiary information within the policy or account. So there is no need to include these in your Will. They will directly transfer to whomever you designate as beneficiary.
Life insurance proceeds - Like retirement plans, life insurance policies have beneficiaries and contingent beneficiaries named within the accounts.
POD and TOD accounts - As we mentioned earlier, by design, Payable on Death and Transfer on Death accounts will automatically go to whomever you listed when you set up the account.
Stocks and bonds held in beneficiary - Since you name a beneficiary when you first acquire the stock or bond, no need to add these into your Will. If you need to make changes at any time, you would do so directly with the brokerage company who handles your accounts, not through your Will.
Sometimes, just understanding what to include in your Will (as well as what NOT to) can make it easier for you to bite the bullet and get started. We understand that Estate Planning can feel overwhelming. That’s why we make it as easy as possible for you to understand the process, and better than that, affordably and efficiently complete it! And if you have any questions at any time along the way, we are here to help you.
Estate Planning is one of the most important things you can do for yourself and your family and setting up a Will is a first great step!