Where There's A Will, There's A Way. 6 Steps to Getting Your Financial House In Order.

Updated: October 3, 2016 by Kara Downing, CFP®​

There is common misconception that only the wealthy die with an "estate." In reality, we are subject to the same probate laws that guide the wealthiest of estates regardless of our net worth. The bottom line is if you don’t have a valid will, your state will create one for you, and it’s highly likely that it doesn’t share your same interests, desires, and intent for your family and property. Sadly, more than 55% of Americans die each year without a will; and while it’s understandable why the subject of death is one that people prefer not to contemplate, if they understood what happens to their estate when they die “intestate” (without a will), they might reconsider their reluctance. Dying intestate, even with a small estate can create tremendous and unnecessary hardships – financial and emotional – on the people you want to protect.

A will is the most basic, important tool that forms the foundation of any sized estate. While some larger estates may require more complex tools and techniques to minimize taxes and maximize the transfer of assets, a will is a fairly simple, but legally binding, document. It is usually written by an experienced attorney, but if you prefer to take matters into your own hands, templates are available on the internet. If you choose the latter route, you must do your research to avoid making any irrevocable mistakes.

You only need to follow a few very simple steps to get your house in order:

1. Take Inventory

Make a detailed list of all your assets, including cash, coins, real estate, bank accounts, life insurance, retirement plans, investment accounts, stock certificates, cars, jewelry, family heirlooms, artwork, collections and any other property that holds any value for you or your family. It's equally important to note how these assets are titled (in your name alone, jointly with your spouse or with someone else), as this will determine who inherits your assets at your death which varies by state. Repeat the process with regard to your debts. Your will is an important source of information your family and friends, so be sure it includes the specific location of your insurance policies, legal documents, bank accounts, safe deposit keys, and details on creditors.

2. Think of the Children

If you have dependent children, the biggest decision you have to make is who will become their guardian should both you and your spouse die. A guardian will be responsible for their care until they reach adulthood, and they will also be responsible for managing the assets that you leave behind for your children based on your written instructions. In addition to naming a guardian, your specific guidelines on how you would want your children to be raised are communicated down to the selection of schools, religious upbringing, and parental control to be exercised by the guardian.

3. Allocate Your Assets

In a typical family situation, the process of dividing and distributing assets is fairly straightforward. Most of the property is designated to the surviving spouse and then to the children. If there are extended or second family considerations or special bequests, they should be specified in writing. Assets such as life insurance and retirement plans that pass by beneficiary designation will not be addressed in a will. Careful attention needs to be given to how the designations are stated to ensure that there is a succession of beneficiaries in the event the primary and secondary beneficiaries also die.

4. Select an Executor

Upon your death, an executor is responsible for overseeing the provisions of your will, including distributing the assets, paying debts and estate settlement fees. In most wills, the spouses choose each other as executors; however, it is important to name a back-up in the event your initial choice is unable or unwilling to take the helm. Make sure the person you select is someone you and your family trust.

5. Make it Legal

In many states, a simple will only needs to have witnessed signatures to be considered legally binding. Regardless, with so much at stake, and with the costs relatively minor, it would be important to have your will reviewed or, better yet, written by an attorney. Simple wills can cost as little as a few hundred dollars, and if your estate is bigger or more complex, the price of an attorney is worth the investment. You can reduce the cost of an attorney by investing your time up front to take inventory, organize your documents, and think through your desires.

6. Don’t Set it and Forget It

As much as you might want to get the issue of a will behind you, you don’t want to make the same mistake that many others make by letting your will grow stale. Things change – family status, assets, and even your wishes can evolve over time. If your will isn’t current, it may no longer meet your wishes. Wills should be reviewed after any major life event or every other year. It is also vitally important to seek the guidance of an attorney when making changes, as a small mistake could render your will invalid.

While we don't provide legal advice or prepare legal documents, our firm can help you organize your estate plan and connect you with the right estate planning attorney to assist you. We receive no incentives to provide you with this service, and it's one of many that we offer to ensure you have the most qualified professionals on your team.