I made my will about four years ago, when I turned into a mom. I was aware of the importance of it before but you know how life is! 😉 Let’s admit it, making a will is a little boring, so I skipped that part until I realised that it would now imply more people. Up to this date, I still have many friends; some with children, some without, who didn’t go through this essential process. Yet, a will is a smart financial move to me. Here’s why:
Estate Inheritance
If you are the owner of a house, no matter how small it is, having a will allows you to decide WHO will inherit from your estate. You could decide to leave it to one person only or to split it between as many persons as you want. You can even have it up for sale and donate the profits to a charity! On the opposite, you can make sure the family estate doesn’t go up for sale and stays in the family. Basically, your house or condo is worth money. With a will, YOU decide where that well earned money goes.
Without a testament, your estate will be inherited by your spouse. In case of no spouse involved, it will be your children. If no child(ren) involved, your parents are the next in line, followed by close family like brothers and sisters.
Personal Belongings
Usually, personal belongings are separated between siblings without any particular order or upon the executor’s approval, usually the spouse. To prevent unnecessary tensions, you can specify who you want to inherit from your bigger or sentimental belongings: a car, special clothing or jewelry, music instruments or a special collection you might have, etc.
On the other hand, you can also have your executor organize a yard sale and donate profits to charities without anyone arguing.
Retirement Account or Funds
Most of the time, money in any retirement account will be left to the spouse. It does make sense to many. However, you can also choose another beneficiary: children, close friend, brother, niece, etc. Make sure you are aware of tax implications though and that your inheritance doesn’t turn into a nightmare!
Guardian for Minor Children
This is probably THE best reason to have a will for those concerned. In the event your kids would lose both parents at the same time, a testament allows to choose who you think is the best person to take care of them until majority. This person will act as the parent and can also manage money left for them. It’s a role of capital importance.
Without legal papers, a judge will decide who will take care of your children. Most of the times, healthy grandparents, aunts or uncles will be chosen. Making things clear will prevent fights or injustice between the two families involved. If there is no consensus in the family, a family council can be made up to ensure each opinion is taken into consideration for important decisions. Do you really want your kids to go through all that?
This may seem less like a financial move now. Indeed, it is very much linked with emotions and values. However, as you hopefully leave money for them, you might as well make sure it is well managed.
A Word About Debts
If your debts are high, the only proper way to cover them all is by having proper insurance. Otherwise, the executor of the testament might have to cover your debts with the inheritance, leaving basically nothing to the ones you love and care for.
Final Word
Having a will is a smart financial move because it protects your financial assets – assets that you worked hard for. A will, combined with proper insurance, is the best way to ensure your beloved ones’ future or to support your personal values and goals. It’s an investment on what will be left and to whom, when you’re not there to make the decisions yourself.
