Eminem and Estate Planning: When Do You Need a Will?
The great entertainer Eminem once said in his 2002 classic Lose Yourself, “You only get one shot”. I cannot think of a better way to describe estate planning. Unfortunately, when we pass away we lose our chance to instruct our loved ones on how our estate should be handled. Without a will (this is called “dying intestate”), your assets will be divided according to the laws your home state has in place regarding estates.
When I was fresh out of college with a business degree and some poorly-fitting suits, I was excited to dig into my new craft of financial planning. As a part of this I got to work executing an important piece of all financial plans: completing a will. I called an attorney friend, explained my life situation, and told him I needed a will. His response was simply, “Why?”
As with anything in the world of financial planning, every person’s situation is different. With this caveat in mind, I’d like to offer a shortcut in the form of a two-part test to answer the question, “Do I need a will?”. My attorney friend was right! I didn’t need a will yet, and that was because at that moment I was missing two things: assets and dependents.
Do you have assets?
One function of a will is directing who should inherit the assets you leave behind. For those of you early in adulthood, you likely have a simple situation in terms of assets. However, as life progresses, you’ll likely start to accumulate savings, investments and physical assets like a vehicle or real estate. As your personal balance sheet starts to grow, it’s probable that you’ll want to be more intentional about who receives these assets after your passing.
For most, it’s relatively simple. You’ll leave your estate to your spouse, children, or other family. However, what if you don’t want your minor child to receive those assets until they are mature enough to handle them? What if you want to make sure your favorite charity receives a final gift? Would you like to make sure a trustworthy person ensures your estate is distributed correctly? A will is your chance to answer these questions and more.
Do you have dependents?
This second question can be sad to think about but is certainly important. If you have children or other dependents, a will can be a powerful tool for ensuring they are taken care of if you (and your spouse if you’re married) pass away. First, a will can direct who will serve as the trustee of your assets that you’ve left your children. This includes making sure those funds are appropriately spent and invested. Additionally, a will can direct who you’d like to be your children’s guardians going forward.
If you were to pass away, these issues would be very emotional for your loved ones to discuss. Leaving instructions in a will can help prevent potential arguments and hard feelings as to who will serve as trustee or as guardian.
Bottom Line
I am not an attorney, and I certainly can’t give blanket legal advice. However, I am convinced that if your answer “yes” to either of these questions, you would benefit from having a will completed. Take time to find an attorney that can accomplish what you need for a reasonable price. Hopefully, your will sits in a lock box for decades to come, but if the worst happens you would certainly want it there. Remember the wise words of our Detroit friend, “You only get one shot…..”