Last Will and Testament: The Ups and Downs

A last will and testament is written legal document that contains your instructions on how your properties and assets should be divided amongst your dependents in your absence. These assets are your  bank accounts, real estate properties, brokerage funds, heirlooms, vehicles, items of sentimental value and other personal property.

A will, just like any other planning tool, has its own advantages and disadvantages. Typically, a will is drafted with the help of a solicitor, but it may be expensive for some people so there are other alternatives. For example, you can always write it on your own, or use online wills prepared and authenticated by professional solicitors.

Advantages

A will allows you to appoint a chosen family member or a guardian of your choice to care for your dependents until they become legal adults. A will is less expensive compared to a trust-based estate plan. It is best for individuals and families who do not have assets to go to a court process called probate. It can also directly identify to whom personal and heirloom properties will be given.

Disadvantages

A will may not make any provisions if you should become incapacitated although this depends on the conditions outlined in the will. A will may not sufficiently protect your assets from creditors. It may not provide enough tax payments, leaving your estate or beneficiaries to pay hefty federal and estate taxes. It must go through probate, which can take anywhere from a few months to a few years. Drafting wills can be expensive through a lawyer, or complex if self-written.

A will generally addresses the distribution of the bulk of you assets; however there are some assets that are not covered by your will such as life insurance payouts, community property, retirement assets, investment accounts that are designated to be transferred after death, and assets owned by two or more people where the lone survivor takes ownership.

Don’t let the long list of possible disadvantages discourage you from getting and writing your own will. All of these advantages can be addressed with the right estate-planning tool for you. With proper planning and division, it offers reassurance that your hard earned properties will be given to the people you trust and will not be handed to the government for proper distribution.

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Image resource: http://en.wikipedia.org/wiki/File:Stipula_fountain_pen.jpg

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