You Need A Will

by mike on January 28, 2012

I thought about just making this a four word post: “you need a will!”  That pretty much explains it.  But, I thought maybe I should take a few more words to try and convince you why.

The main reason is that YOU get to decide who gets your assets instead of the state.  To me, that sounds like a good plan.  Even if you think you don’t have enough stuff or money to worry about, it still is very important.  Having our first daughter, Aly, was enough to motivate us to get our wills done.   Let me use the example of what we have set up to help guide you in what you need to do.

First, you must name an executor of the will.  This is the person in charge of making sure everything in the will gets carried out as stated.  Many people name a family member the executor, but I don’t recommend doing this.  I saw my Dad act as executor when my Grandpa died, and it was like a full time job.  Not only that, the executor is often blamed for things in the will (that they had nothing to  do with setting up, mind you) that family members or friends are unhappy with.  It can cause hurt feelings and even a rift in the family.  Name someone outside of the family (like a financial planner or estate attorney) as executor to help avoid the drama.  Mandy and I named our financial planner, knowing that he will be able to take a fee (as provided by law) for carrying out the executor duties.

Of course, we set up our wills to have everything we own go to each other if something were to happen to one of us.  If something were to happen to both of us, then it goes into a trust for our children.  It is extremely important to set up that trust carefully.  If you have the proper life insurance set up, and have done a good job getting out of debt, there should be a substantial amount of money heading the kiddos way.  You want this to be a blessing, not a curse.

You must designate in your will when your children will have access to the money.  We set it up to be age 25.  We figured that was old enough for it to bless them, but not be a burden.  I know what I was like at age 18 and if all of a sudden had access to $500,000, it would not have been good.  Just imagine what you would have spent that money on when you were that age and you will quickly understand why it is a good idea to designate a later age for your children to get their hands on the money.  I have heard some horror stories from some of my financial planner friends who have seen young lives be ruined over this.   You can even spread it out to where they get access to half at age 25, then half at age 35, etc.  It doesn’t have to be those ages, that is just an example.

If, God forbid, something does happen to you and the money is to put into the trust, you have to designate who is going to be in charge of that trust until the kids are eligible to receive the funds themselves.  Again, a very important decision.  We chose Mandy’s brother who is extremely tight with money and has a very similar financial philosophy than us.  We discuss those philosophies often and so he knows very well our thoughts about what we would do with that money.

The important decision you need to make is who will be the guardian of the kiddos.  This is something that should be thought through very carefully and discussed at length.  Some may automatically think of their parents (the grandparents), but you do need to think about age.  What will their age be when your youngest is turning 18 and it is it fair to expect them to meet the demands of parenting teens when they are (I’ll try to put this as nice as possible) getting up there in age.  As with the trustee, try to choose someone who has a similar parenting philosophy as you and will make the transition as smooth as is possible given the circumstances.

One final point: make sure to notify the people you name to  be trustee and guardian.  In fact, you should actually discuss it with them BEFORE you officially name them in your will.  It is a huge responsibility to place on someone to be in charge of your money and, especially, to raise your kids.  Hopefully, they will be honored, but you just never know. Don’t take it personally if they decline.  Instead, you should see it as a mature response if they truly don’t feel they can handle it.

By the way, I am certainly not a lawyer, so none of this is intended as legal advice.  It is just what Mandy and I did and an attempt to convince you that these are extremely important decisions that YOU want to make, not a judge somewhere.  My hope and prayer is that you are convinced.

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