Your last will and testament, aka your will, is a legal document that lays out how you want to distribute your assets and possessions after your death. If you die without a will, known as intestate, the distribution of assets, as well as the guardianship of any minor children, will be decided by a probate court. Intestate succession laws vary by state, but you can count on this method of estate settlement to be more costly and more of a hassle for your loved ones. That’s why it’s important to create and update your will, regardless of your age and stage of life. Maintaining a will ensures your final wishes will be carried out and it makes life easier for the people left behind. Now that you understand why a will is so important, let’s look at the decisions you need to make while your creating your last will and testament.
Choose where your assets will end up after your death
First of all, you need to understand which assets you can distribute by will vs. by naming beneficiaries.
Distributed by your will
- Individually owned assets such as real estate, vehicles, and bank accounts
- Your share of any real estate held with one or more people as tenants in common
Distributed by beneficiary designation
- Life insurance policies
- Retirement accounts
- Investment accounts
Within your will, you can give instructions for the distribution of your will based on different circumstances. For example, if you are married you would usually leave everything to your surviving spouse. But one spouse will always pre-decease the other, so you should also leave instructions for how to distribute your assets in that situation, such as to any children you have, other family members or friends, or charitable institutions.
Creating a will can be an emotional process–it involves thinking about your own death, as well as potentially outliving your spouse and other family members. However, it’s important to go through this process to ensure that your loved ones are protected and taken care of after your death. As you go through life changes, such as births, deaths, or marriages, you should update your will and beneficiary designations accordingly.
Choose an executor of your estate
This is one of the most important decisions to make about your last will and testament. The executor has the responsibility of carrying out your instructions by distributing your assets and settling the estate’s debts and taxes. If you don’t appoint an executor, the court will name one for you. It’s best to choose an executor yourself, so you can ask that person if they are willing to take on the responsibilities of being an executor. It requires a certain amount of time and effort, though executors can receive compensation as a percentage of the estate’s value, a commission on transactions, an hourly rate, or a flat fee.
Another option is to hire an institution, such as American National Bank, to serve as the executor of your estate. Our estate planning services include assistance with creating your estate plan and implementing it. We can serve as executor of your estate and provide estate settlement services. Hiring an institution as your executor can save loved ones from the hassle of serving as executor while they are also grieving. We will settle your estate professionally and impartially, according to your wishes. In families where there may be some disagreements or resentments over the contents of your will, a professional, impartial executor can help to fend off drama.
Select a guardian
If you have young kids, it can be scary to think of what might happen to them if you and your spouse or other parent die, but it’s an important consideration for your will. Designating a guardian for your minor child or children will make the transition easier for everyone involved. You can ask in advance if your top choice is okay with the responsibility of guardianship. And you get to make the selection instead of leaving it up to the court.
You may also want to establish a trust to support your minor children in the event of your death and appoint a trustee. At American National Bank, we provide our trust services to you as a fiduciary, which means that we exercise the utmost good faith and are obligated to refrain from self-interested actions when working with clients.
Make plans for your business
If you are a small business owner, there are additional responsibilities and concerns to consider when creating your will. If you don’t plan to sell the business, you will need to choose a successor and you may even want to allocate some of your personal funds to keep the business going. And, just as you do for your personal assets, you may need to elect an executor to handle these affairs after your passing. Our Trust Services Team offers Business Succession Planning to help you ensure a smooth transition of management and ownership while safeguarding all stakeholders’ financial interests.
There is a lot at stake if you are a small business owner and don’t create a will. As with your other assets, your business will be distributed according to state intestate law. It’s likely to end up in the hands of your closest relatives, whether or not they’re qualified to run a business. And even if you plan to pass your business on to your children one day, you don’t want to pass it to minor children without a designated adult to run the business until they can take over.
Leave instructions for your digital assets
As more and more of our lives play out online, consideration of your digital assets should be part of the will writing process. While you don’t necessarily need to leave instructions for your social media accounts in your will, you should still make a list of your digital account logins for your executor. That way they can access and close your online accounts as needed.
Provide funeral instructions
Many people choose to plan and pre-pay for their funerals before their deaths. However, you can also dictate in your will that you want your estate to pay for the costs of your burial and memorial services. It will also help your family to know what wishes you have for a funeral, memorial service, or celebration of life. Knowing in advance will make things a little easier on them when planning an event in the wake of your passing.
Finally, make sure your will is legally valid
It’s possible nowadays to use online tools to write your will. In some states, including Virginia, handwritten wills are still permitted. However, if you go the DIY route instead of having an attorney prepare the legal documents, make sure you follow the requirements under your state’s law to create a legally valid will. In North Carolina, for example, that means your will must be self-proving–signed by two disinterested witnesses in front of a notary.
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You’ve worked hard to accumulate assets and build a financially confident future for yourself and your family. For nearly a century, American National Bank has helped individuals and families in Virginia and North Carolina with growing and preserving their assets, planning their future, protecting their heirs, providing for charities and ensuring their family and/or business thrives. Contact our Wealth Management team to learn more!