So you finally got around to handling the slightly unpleasant, yet necessary task of preparing to draft your will and record your wishes for what should happen with your assets after you pass away. Now, you might be wondering exactly what should go on your will, and who you need to add in terms of executors and beneficiaries. Our estate planning law firm has helped countless clients to draft their wills and we can offer answers to some common questions we receive daily. These are for informational purposes only, and we recommend you seek the help of an attorney before drafting your will.
What Assets Should Be Included In My Will?
Most people have their financial asset distribution as their main goal when writing a will. You should have in mind both the complete inventory of assets you have at the time of writing your will and the assets you may collect along the way until your death. Assets owned solely in your name should be included in your will, as well as clear instructions on which beneficiaries will receive what assets, or how large assets such as real estate properties and investment accounts will be distributed.
Examples of assets you may want to add to your will can include real estate, vehicles, personal property, savings accounts, retirement plans, stocks, shares, and bonds. If you own assets jointly with a spouse, you can only include your share of the joint assets in your will. Start by listing all your significant assets. Then, you’ll decide which ones you want to include in the will, and which ones must be passed on through other methods (such as transferable-on-death accounts or trust funds).
What Should You Never Put In a Will?
Some assets cannot be added to a will either because they already have a beneficiary designation or because they are set up in a way to avoid going through probate. Property owned in joint tenancy with a spouse cannot be included because your share of the property would go directly to your surviving spouse. Investment or retirement accounts that have a transfer-on-death or payable-on-death designation will go to the person you added as a beneficiary on the account paperwork, and cannot be included in your will. The same is true for life insurance proceeds, stocks and bonds, and bank accounts with a payable-on-death designation.
Another type of asset that stays out of your will is a trust account. Many people use trusts as a way of avoiding probate and transferring assets directly to their chosen beneficiaries. Given that every asset added to your will requires probate before distribution, trust assets should not be included in the will as they have their own separate distribution process.
How Do I Go About Naming Beneficiaries?
After establishing what assets you would like to pass on, you will want to write down a complete list of your potential beneficiaries. A beneficiary is any person named on your will as the recipient of all or part of an asset you wish to transfer after your death. Beneficiaries can include immediate relatives, other family members, friends and even charity organizations. There is no limit to how many beneficiaries you can name, and your executor can also be a beneficiary if you wish to do so.
When planning which beneficiary gets what, it is important to have in mind the issue of inheritance tax. How and when each beneficiary receives their inheritance will impact how much inheritance tax will be owed. The state of Utah eliminated inheritance taxes in 2004, but clients who own or may inherit assets from other states may still be required to pay taxes to those states. This is when it might be best to sit down with an estate planning attorney to discuss how you can try to minimize taxes both for your estate and for your beneficiaries.
What Else Should I Add to My Will?
Besides listing your assets and naming the people who will be receiving them, you should also address other issues such as naming a guardian for your minor children, expressing your funeral wishes and naming a recipient for any pets and personal belongings. If you are a parent to minor children, you may want to specify who will take care of your children in case one or both parents pass away unexpectedly. Without that, it may be up to a judge to decide who will be responsible for your kids.
In addition, many people who own pets and consider them as a part of their family may want to add their pets to their will. In many states, pets are considered property just like any other asset. In most cases, a pet cannot be named as a beneficiary. Instead, if you want to make sure your pet will be cared for, it may be best to name someone as a beneficiary that will become the new owner of your pet and can provide for it.
Last, some clients may want to add details about their funeral wishes and preferences for how they would like their final preparations to be carried out. Unless your family members are aware that you added funeral wishes to your will, it may happen that those are not discovered in time, because your will is rarely read before the funeral. Make sure to either add your funeral wishes to another separate document or speak to your family members and let them know about where they can read about your preferences. If you need help drafting your will or have questions, the estate planning attorneys at Amicus Law Firm are ready to assist you. Contact us at any of our Utah locations to get started.