When Do I Need A Will? The Short Answer is ‘Now’
Our experts explain why every adult should have a will
Creating a will is not difficult, but there’s a certain amount of discomfort around the subject that causes people to put it off.
“It’s hard for people to face their own mortality,” says Winston McKnight, a Certified Trust and Financial Advisor (CTFA) at Cadence Bank. “They’re uneasy about it.”
And many, many people delay creating one. According to Caring.com’s 2022 Wills Survey, only 33% of Americans have a will or living trust. Only 24% of 18-34 year olds have wills, and just 27% of 35-54 year olds do. More baby boomers (ages 55+) have wills, at 45%, yet that leaves more than half (55%) without one. That’s a significant factor for that age group when the Social Security Administration puts average life expectancy at 85.5 for a man who is 70 today, and 87.8 for a woman.
Myth: Wills are only for rich people
Sure, you say, I know wills are important — but only for the immensely wealthy. I’m not in that category.
Neither are most people. The survey noted other reasons that people delay. The most common was, “I just haven’t gotten around to it,” followed by folks who felt they didn’t have enough property to worry about.
What these people don’t realize, however, is that there are already provisions made in the case of their deaths — and the state they live in will make those decisions if they die.
“Actually, everyone has a will, whether he likes it or not,” writes Alexander A. Bove, Jr. in “The Complete Book of Wills, Estates & Trusts” (Holt, 2005). “That is, every state provides laws that dispose of a person’s estate if he did not make arrangements to do it himself.” That can even include appointing guardians for minor children.
Often, McKnight says, people delay making a will because family situations are complicated. With the divorce rate in the United States hovering between 40 and 50 percent — statistics are even higher for subsequent marriages — it is common for there to be spouses, ex-spouses, children, stepchildren and large extended families. And, sorting through all that in terms of what you want to happen when you are gone can be hard. In fact, 36 percent of the people in the Caring.com survey with children under 18 said they didn’t have a will yet, either.
“In many cases where there are children involved, the concern is how to construct your will so that each family member is considered,” McKnight says. “There may be different needs for different children.” Young children must have guardians appointed, and in the case of a blended family, that may mean more than one guardian, which can be tricky.
In the case of adult children, their personalities may come into play.
“You may have a family with several children, but one or more may be irresponsible in handling their affairs,” says Rita Bishop, Trust & Estates Officer at Cadence. “What they’ll do is make separate provisions for different children, like a trust.”
Fact: Every adult needs a will
But let’s get back to the basics. Who really needs a will?
“Anyone who’s a legal adult, anyone who has children, anyone who has assets,” says McKnight and Bishop, almost in unison.
Many people who just need a simple will and want to avoid paying a lawyer use an online service or a software package that helps draw one up. While this may be better than having no will at all, the act of sitting down with a financial advisor is a more personal transaction, and you’ll be less likely to leave out important details or make errors.
“We talk with so many different clients and we see so many different situations,” McKnight says. “From our experience, being able to talk them through their particular circumstances is very helpful.” Financial and trust advisors have dealt with whatever situation you bring to the table — family awkwardness, complicated property holdings, or just not knowing where to start — and can help you work through it.
Financial advisor vs. attorney for estate planning
The better avenue is to do your homework with a financial advisor before you see a lawyer, so you have proper documents in hand and important decisions already made. These include:
- Who your executor will be
- Who you want to name as guardian for minor children
- How you want to distribute your assets, including finances, property and heirlooms
- Being ready to appoint a durable power of attorney for your finances and a durable medical power of attorney
- Making decisions ahead of time for a living will (which comes into play if you are on life support) and HIPAA privacy documents (which will tell medical professionals who can see your medical records if you are incapacitated)
- Locating and collecting important documents like financial statements, income tax returns, military benefits, pensions, insurance policies, mutual funds statements, and anything else that speaks to your personal wealth or benefits due
“Have that conversation with your advisor on the front end, so you can hand the attorney a piece of paper saying, ‘This is what we talked about’,” says McKnight. On a complex will, you will save your beneficiaries money in the end. Don’t forget about that aspect — while creating the will may cost money up front, executing a poorly done or incomplete will can take money away from your estate and beneficiaries.
“If you have a taxable estate, you can pay almost up to 50 percent in taxes,” Bishop says, “and that’s not including legal fees that can be charged against the estate. Ask yourself, what’s it going to cost my beneficiaries?”
Couples who create joint wills
In the case of couples, attention needs to be paid to provisions made as to who dies first and who dies second, especially in complicated families, Bishop says. Circumstances can change between the deaths of the first spouse and the second spouse.
“I had an estate where the wife died before the husband, and her beneficiaries were different than his beneficiaries,” Bishop says. “When he died, her stuff went to his heirs. They had similar wills to take care of one another, but when it came down to when the second person died, she had a different perspective of who she wanted things to go to. It can happen a lot with second marriages, where there are children from each.”
Ready to get started?
Because it’s not always comfortable, it may help to focus on how you’ll feel when you’ve gotten everything taken care of.
“Relief is your first emotion,” says Tanya P. Castro, a business development manager at Cadence. “It’s odd when you’re going through it, and you’re thinking about your death. But once you do it, you’ve made it easier on your loved ones.”
If you’re ready to talk to a Cadence Bank estate planning expert, please contact us today.
This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.