With August being National Make-a-Will Month, there’s perhaps no better time than the present to consider making a new will, or updating a will made long ago. While it may be true that making a will can be inconvenient, and at times even difficult, it’s one of the most important things you can do for your loved ones. Below are some important reasons why maintaining an updated will should be one of your highest priorities:
- You decide who receives your estate. In the absence of a will, the law determines who receives your estate and how it will be distributed. The result will likely be different from what you would really desire. A will that simply leaves all of your estate to a surviving spouse, child, more distant family member, or even a charity (in keeping with your wishes) will avoid this.
- You decide who will handle the affairs of your estate. A will allows you to name an “executor” who will have the legal authority to administer and oversee the affairs of your estate once you are gone. This person is typically a spouse, adult child, other close family member, or friend. In the absence of a will, a court will decide who will administer your estate.
- Simplifying the probate process. Unlike other legal documents, a will does not have true legal effect until it has been “probated.” Probating a will requires the will to be submitted to a probate court where a judge will rule on its validity. Once the will is probated, Texas law permits an executor to perform his or her responsibilities independently—free of virtually any court supervision. But this can occur only if the will clearly permits it. A will can also waive the legal requirement of an executor to obtain a “fiduciary” bond (a form of insurance on the executor’s performance of his or her duties). Including provisions like these in the will can greatly simplify the administration of the estate and result in significant cost savings, leaving a greater portion of the estate to be distributed to the beneficiaries.
- Protecting minor or incapacitated children. Where minor or financially immature children are beneficiaries of your estate, a will can establish a trust (or similar vehicle) to ensure their portion of the estate is managed and preserved for their benefit until they reach a designated age or level of financial maturity. The will can then designate a family member, trusted friend or even an institution as “trustee” to administer and oversee the trust in the way you intend. The will can also name a trusted family member or friend as the legal guardian of your minor children to ensure their physical safety and well-being in your absence.
- Protecting your estate from a new spouse. It’s not uncommon for a surviving spouse to remarry at some point following the death of his or her spouse. This can result in a portion of the estate inherited by the surviving spouse ultimately going to the new spouse. To prevent this, your will can establish a trust for the benefit of your surviving spouse to ensure his or her inheritance ultimately goes to your children (or other intended beneficiaries) upon the surviving spouse’s death.
- As a word of caution, the benefits of having a will can be compromised, or even lost altogether, if you fail to plan for assets that automatically transfer to others outside of the will. Common examples are life insurance policies, retirement accounts and certain bank (or financial) accounts that designate who is to receive the policy or account upon your death. These assets will typically pass directly to the named beneficiary, regardless of what the will says. It is therefore of utmost importance to coordinate these beneficiary designations with the provisions of your will.