What Is a Will?
Generally speaking, a will is a legal document that coordinates the distribution of your assets after death and can appoint guardians for minor children. A will is important to have, as it allows you to communicate your wishes clearly and precisely. It is advisable to work closely with an attorney to create and update your will.
When there is no will
Without a will, the state in which you reside decides how to distribute your assets to your beneficiaries according to its laws. This is known as dying intestate, and the resulting settlement process may not produce the results that you would prefer for your survivors. You can prevent this from happening by having documents drafted that reflect your wishes.
Contents of the will
A will generally includes: Designation of an executor, who carries out the provisions of the will. Beneficiaries those who are inheriting the assets Instructions for how and when the beneficiaries will receive the assets. Guardians for any minor children. For assets that do not allow for the naming of beneficiaries (such as some bank accounts and real estate), the will is the place to designate who will get them, as well as any related special instructions. Some types of assets allow for the naming of beneficiaries (such as IRAs and investment accounts), which enables a direct transfer of the asset without involving the will and has greater authority than the will. These types of assets usually avoid probate and the associated fees and may avoid certain taxes, helping you maximize what you leave to your beneficiaries.
Assets that pass through the will must undergo the probate process.
Probate is a legal process for settling an estate, whether one has a will or not. The probate process varies by state—many states offer a quicker, less expensive option if the assets subject to probate are below a certain value (for example, $25,000 or $50,000). Probate is also public record, so it decreases the level of privacy of the estate.
Generally speaking, an asset that allows the owner to name a beneficiary will not have to go through probate.