Have you put off making a will? If so, you’re not alone. According to a 2017 survey conducted by Caring.com, only 42 percent of American adults have estate-planning documents, like wills and living trusts, in place. And for those with children under age 18, the percentage is even lower: 36 percent (Nick DiUlio, “More than Half of American Adults Don’t Have a Will, 2017 Survey Shows,” Caring.com, August 16, 2017.)
While preparing a will may not be the most pleasant way to spend an afternoon, it could be the most productive—especially for your heirs. Without a valid will, your assets could be tied up in probate court for months, possibly years. What’s more, the court will be forced to make decisions that may not conform to your wishes.
Why are so many people reluctant to take this basic, but important, step? In many cases, it is the result of five common misconceptions:
I’m not wealthy enough to need a will. If you consider the value of your car, furniture, and other worldly possessions, you may be worth more than you think. Plus, some items may have sentimental value to your heirs and will need to be distributed fairly. You can also use a will to make legal arrangements—such as naming a guardian for your minor children—that have nothing to do with your wealth.
My spouse will inherit everything. In fact, children from a previous marriage may be entitled to some assets. Plus, there’s always a chance that you and your spouse could pass away at the same time. If so, the distribution of assets could get tricky. Also, be aware that assets with a designated beneficiary, such as life insurance, IRAs, or a 401(k) may bypass your spouse if he or she is not named as the beneficiary. So check periodically to make sure your beneficiaries are up to date.
All my assets are jointly titled. Legal titles, such as joint tenants with right of survivorship (JTWROS), can be helpful when it comes to transitioning financial accounts. In some cases, however, they can make things more complicated, especially if the joint owner has also passed away and no further instructions have been provided.
I don’t have any heirs. If you don’t have any surviving family members, your assets can still be put to good use. You can leave them to a trusted friend, to your alma mater, or to a favorite charity.
I’m not ready to set my final wishes in stone. Updating a will is very common and, because circumstances can change, almost expected. Once the basic framework is in place, adjustments are relatively easy to make and can usually be done at a modest cost.
Please don’t let these common misconceptions keep you from preparing a will. Given the vital role a will plays in distributing your assets, protecting your loved ones, and making sure your final wishes are carried out, now is the time to seek out a qualified attorney and make sure you have a legally viable will in place.
This educational third-party article is provided as a courtesy by Martin Blau and Saul Fisher, agents, New York Life Insurance Company. To learn more about the information or topics discussed, please contact Martin at 917-714-9315 or Saul at 718-486-4667. Neither New York Life nor its agents provide tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.