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Will-writing, estate planning, estate administration, probate, trust funds, inheritances – the list of things for will-writers to consider goes on and on. People are often deterred from starting their estate plan because they have no idea where to start and often don’t think it is worth the time and money to plan so far into the future. In this blog, we’ll take a look at some of the benefits of having a will and reasons to start your estate plan sooner rather than later.
Before going into the benefits, let’s first look at what happens when someone dies without writing a will. Dying without having a valid will is called dying intestate. When this happens, the courts have a specific course of action that they take to distribute your estate. An estate administrator is to be appointed to act as the estate executor would. Generally speaking, a person’s spouse and children inherit the entirety of the intestate estate. If the testator doesn’t have a spouse or children, their parents or surviving relatives are left to receive inheritance from the estate.
Some people might argue that since they only want to leave their estate to their spouse and children, there is no point in preparing a will. To answer this, let’s look into some of the advantages and benefits of writing a will, even if the process of intestate succession is similar to your own intentions.
The most obvious benefit to writing a will is that you get to decide exactly how your estate is distributed. When someone dies intestate they have absolutely no say in what happens to their estate. By writing a will, you can choose who is a beneficiary of your estate and how much each beneficiary is to receive. Will-writers are able to get creative with their assets; some will-writers will choose to create trusts for their beneficiaries, who must meet certain conditions like graduating university to access their inheritance. In intestacy, there is a set formula that determines how much of the estate the spouse and children each receive. The deceased doesn’t have any say in this and is unable to make specific provisions for different people.
Every estate has an executor or administrator who is responsible for paying estate debts and taxes, handling estate assets, and distributing the estate to beneficiaries. You’ll want to appoint someone you trust to take on this role, and make sure they are aware of exactly what they will be responsible for. By preparing a will, you’re able to decide who the estate executor is. When you die intestate, anyone is able to apply to be the administrator of your estate. The courts have the final say in who is given the position.
Another decision you get to make with a will is who your children’s guardian will be. When both parents pass away while their children are still minors (under the age of 19), a guardian must be appointed to undertake the role of their guardian. In your will, you’re able to appoint who you wish and find a relative or friend who you believe would be the best fit for your children in this tragic scenario. You are also able to use your will to put aside parts of their inheritance for a specific purpose, like tuition or money to put towards a house in the future.
Most wills are required to go through probate where they must be proven valid before the courts. During this process, there is a probate fee of approximately 1.4% of the entire estate’s value that must be paid. You can’t avoid probate fees by not writing a will – the appointed estate administrator of the estate must still complete the probate process. Further, what might come as a surprise is that estates with prepared wills are granted probate much quicker than intestate estates. This means that loved ones receive their inheritances much sooner and with more ease when a will has been prepared.
By creating an estate plan, there are ways to minimize probate fees and defer tax payments to ultimately increase the value of your estate inheritance for loved ones. For example, a common estate planning tool is gift giving before death. By doing this, you can lower your estate’s value, minimizing probate fees that must be paid upon your death. In the end, the same people receive their inheritances; however, there’s more of the inheritance for them to enjoy, and you can watch them enjoy the gift in your lifetime.
By writing a will, you have the flexibility to distribute your estate exactly as you’d like. One way of making sure your gift is given exactly as you wish is to use trust accounts in your estate plan. Maybe you want to give funds to a child in increments rather than a lump sum. Or, you want your spouse to continue living in your home, but have it given to a child after both you and your spouse pass away. By preparing a will, you are able to control exactly how your estate will be handled after your death.
Another consideration is that wills are not final documents and can be revoked or amended at any time. After your first will is written, it’s easy and often important to re-write the will or to prepare a codicil to make a change. By writing a will you’re not locked into what you’ve written, so long as you have the capacity to make changes later in life. For more on this, read our blog on testamentary capacity in estate planning.
By creating your own estate plan, you are able to speak directly with loved ones and ensure that they know what to expect upon your death. Loved ones are often disappointed or offended if they’re left out of the will without knowing why beforehand, and this can unfortunately lead to legal conflict within the family. Simply explaining your intentions can help to alleviate a lot of tension. Further, if you die intestate, it can be stressful for your loved ones as they’re left uncertain with what will happen to the estate. Family members might argue over who they believe should be the estate administrator as they are unsure of your final wishes.
Often, people are concerned that they’re too young to prepare their will. While there isn’t an age that is the “perfect” time to write a will, we have a blog that outlines when a good time to prepare your first will might be.
At a minimum, having a will in your name will provide certainty for your loved ones in the difficult circumstances of a death in their family. Preparing a detailed estate plan may cost you money initially, but it can save your estate thousands of dollars and countless hours for loved ones dealing with an intestate estate. If you need help preparing your first will, contact an experienced estate lawyer today. We can help you create an estate plan perfect for your individual circumstances.