About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C. area that works with clients virtually across the country. Lamar's work with his clients starts with a focus on budgeting, insurance, optimizing employee benefits, investing, and retirement planning. Dream Financial Planning is a Fiduciary Financial Planning firm specifically designed to help individuals in their 30s and 40s take control of their finances and fulfill their dreams. Feel free to schedule a complimentary consultation to learn how we use the DREAM Financial Planning Process ™ to help our clients achieve their goals.
August is National “Make a Will” Month, and it’s a great annual reminder to update your Will if needed and create a Will if you don’t have one already. A Will is an important estate-planning document that can help you transfer your assets with ease. Having a proper Will can make the difference between a smooth transfer of assets and a probate nightmare.
Let’s learn more about what Wills are, why you need one, and some tips on how to create or update your Will during National “Make a Will” Month. If you need to get a Will or have questions about Estate Planning please take a look at our checklist below.
This checklist covers the key considerations that can inform and affect:
- Living Trusts
- Irrevocable trusts
- Powers of Attorney
- Living Wills
What Is a Will?
A Will, or a Last Will and Testament, is a legal document that outlines your intention for the distribution of your assets after your death. It is an integral part of a comprehensive estate plan and helps your loved ones avoid legal and financial loopholes and know what to do with your assets. These explicit instructions are essential and can help everyone avoid a lot of headaches. If you're looking for help to set up or review your Estate Planning documents, feel free to send me an e-mail.
Wills vs Trusts
When you’re researching estate planning documents, you have likely come across both Wills and Trusts. While both documents can help dictate what you want to do with your assets when you’re gone, there is one main difference.
The primary difference between a Will and a Trust is that a Trust takes effect as soon as it’s created and signed, while a Will does so only after you pass away.1 There are also two different types of Trusts to consider: irrevocable and revocable.
- Irrevocable Trusts are Trusts that can’t be changed or canceled after they have been signed.
- Revocable Trusts can be changed, and the grantor has the right to change the terms or even end the Trust.
Some other differences between Wills and Trusts are that a Will requires probate to transfer items to beneficiaries, but Trusts can avoid probate. In addition, Wills are public record and Trusts can remain private. Because a Trust takes effect right when it’s created, it can be used if you become incapacitated and unable to make decisions independently.
Do You Need a Will?
We face so many financial obligations every day, so should creating a Will be at the top of your list? Most financial experts say yes, you need a Will. Even if you don’t have substantial assets to transfer, a Will can still help your family feel more confident about your wishes. In addition to making the transfer of assets easier, here are a few benefits of having a Will2:
- It allows you to distribute your property and protect your loved ones after you pass away.
- It can provide peace of mind to you and your family.
- You can plan for those in your care (e.g. naming a legal guardian for your children or pets).
- It may prevent family conflict.
- It can eliminate confusion over assets.
- It can ensure that your assets go to the people you want to have them.
- It can help you build a lasting legacy.
- You can use your will to benefit charity.
These are just a few of the many benefits of having a Will. To celebrate National “Make a Will” Month, let’s look at how to create a Will.
How to Create a Will
Creating a Will can be a straightforward process, or it can involve the help of attorneys and financial advisors. Also, the process will depend on where you live because every state has different requirements for creating a will.
Generally, the first step in creating a Will is to determine what you want to include. You should include instructions for passing along your assets after your death, including ownership and other instructions. You may consider working with an attorney to ensure that your will contains everything it needs.
Next, you will likely sign your Will in front of two witnesses, and these two witnesses will also sign your Will. Some states require a self-proving affidavit that you sign in front of a notary, other states require your Will to be notarized, and some states don’t require any special self-proving documentation as long as you sign and witness your Will correctly.3
Whether you have $10 worth of assets or $10 million, creating a Will is a good idea to give your family more guidance after you pass. Wills help make the transfer of assets easier and give you and your family more peace of mind. Consider creating or updating your Will this August for National “Make a Will” Month!
Dream Financial Planning Process ™
Whether you're managing student loan debt, starting a family, or considering buying your first home, the DREAM Financial Planning Process™ is tailored to the unique needs of busy professionals in their 30s and 40s. This process focuses more on short-term goals while you grow and evolve in your personal and professional life. So if you're looking for guidance on Financial Planning, optimizing employee benefits, budgeting, student loans, and managing your 401k or investments, we can help.
With uncertainty surrounding the economic stability of our country, it's okay to have fears and anxieties surrounding your savings and investments. The most productive course of action from here is to reach out to Dream Financial Planning (or whoever your trusted advisor might be) and discuss your options. It's easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head. If you'd like a Complimentary Review and risk assessment of your investment portfolio, feel free to send me an e-mail.
In the June Newsletter, I provide a market update and a PDF guide with tips to help you handle inflation. I also shared a CNN article where I shared my thoughts on Crypto and NFTs, 5 savings mistakes people make when building their financial life. If you find any of this information helpful, feel free to sign up to receive future e-mail updates. If you find any of this information helpful, feel free to sign up to receive future newsletters via e-mail.
SIGN UP TO RECEIVE OUR MONTHLY NEWSLETTER BY E-MAIL
Disclaimer: Dream Financial Planning, LLC does not warrant that this information will be free from error. None of the information provided on this website is intended as investment, tax, accounting, or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. Under no circumstances shall Dream Financial Planning, LLC be liable for any direct, indirect, special, or consequential damages that result from the use of, or the inability to use, the materials in this site, even if Dream Financial Planning, LLC or a Dream Financial Planning, LLC authorized representative has been advised of the possibility of such damages. Please consult with your own advisor before making any changes to your Financial Plan, Investments, or Insurance coverage.