Gifting your children $11 million when you are alive will exempt them tax by $5 million according to the new estate tax. An inheritance seems more beneficial to the children if bestowed as a gift when the parents are still alive.
So if you are wondering, “when should I write my will?”
Unfortunately, writing a will is akin to preparing for death, which is a dreadful experience for most people. Yet, you should make it a priority to have a will for the benefit of your family members once you die. Other than old age, other triggering events necessitate one to have a will.
With life’s uncertainty, writing a will is something you shouldn’t keep postponing.
Here are the top instances you should necessitate you to write a will.
1. At 18 Years
When you are 18, you become an adult and have certain privileges and grants. More than 47 states in the US require a person to be 18 years to make a legal will. Some of these young adults have active bank accounts and having a will is necessary.
In some states, if you are younger than 18 years but you are economically independent, married, or part of the armed forces, a will is permissible.
2. If You Accumulate Assets or a Lump Sum of Money
Writing your will is a priority if you start accumulating assets regardless of your age. At 20, what happens when you win a jackpot worth $5,000? Well, tomorrow is unknown and how you want your money spent should be in a will.
States have inheritance laws and dying without a will means that the state decides who inherits your assets. The heirs can range from spouses to domestic workers. If you value your wealth, then writing a will before your age is ideal.
3. “Should I Write My Will When I Marry, Remarry, or Divorce”
Significant life changes relating to marriage can determine when to make a will. Events such as marrying, remarrying, or divorce changes the nature of personal relationships, and inevitably, the beneficiaries. Once you marry, you will need to write a new will in case you need to add your family to the will. The same happens when you re-marry.
Why should you write a will after a divorce? Well, if you had indicated your spouse as a trustee or executor, the will becomes ineffective upon a divorce. You might need to have your ex-wife as a trustee especially when you have children. In this case, rewriting of the will is paramount.
4. When You Become a Parent
Having a will when you get your first child should be a priority for any parent. Intestacy laws ensure that children get a share of their parents’ estate once they die without a will. Yet, the division of your estate might not be as you would prefer.
A will is essential if you have underage kids because it states the guardian in case the parents die. A guardianship clause on your will is something to consider because it ensures that your kids and estate are in trusted care. Update your will once your children are 18 years because they no longer require guardianship.
In writing a binding will, having an attorney and witnesses can be paramount. These attorneys can help you understand the legal requirements when writing a will in different states.
5. After Starting a Business
When you have a business, a written succession plan is binding. In a business partnership, having a will is necessary to avoid conflicts during division. For family businesses, you can groom your children to take over different roles when they take over.
A corporate or secondary will can help you avoid the estate administration taxes based on your state. In such a situation, your beneficiaries will get more money because of reduced taxation. A will should clearly state your shares and any binding agreement with your business partners.
6. When It’s Been Too Long
Preparing a will is important but reviewing that will every so often is critical. You may need to prepare a will if for varying reasons you have stayed for long without updating this critical document. You probably have accumulated wealth over time or sold some.
Your will should be a true representation of your accumulative wealth. If you have stayed for a while without updating your will, it’s high time you had a sit down with your lawyer. The end goal is to ensure that your estate is in safe hand in case of any eventuality.
Reviewing your will periodically will ensure that you remain in control.
7. When a Beneficiary Dies
As the benefactor, you have specific beneficiaries named in your will. These could be a spouse, children or siblings. However, accidents may strike them first leading to uncertainty about their share of the inheritance.
Your testator’s authority gives you the power to revoke the old will. You can then write a new will where you detail the reasons for the revocation. The action nullifies all the codicils in the old will necessitating the writing of a new updated will.
8. Buying a Home
Buying a home changes the value of your estate significantly. Such alterations affect beneficiaries and the amount each gets. You should write a will if you sell or purchase large assets because it influences aspects such as taxation.
If the new home is in a different jurisdiction, the estate planning documents need an update. Understand the taxation and laws relating to writing a will so that you can update yours accordingly. Some states such as Ontario permit dual wills but others do not.
When Major Changes Take Place in Life, Then It Is Time to Write My Will
Is it time to write my will? With the uncertainty of death, waiting to age or get a terminal illness is not reasonable. If you are yet to write a will, make a date with a trusted estate-planning professional to help in drafting the will.
For those who have wills, contact your attorney to ensure that it is up to date and consistent with your wishes. A will in place shows that your family’s security is a priority.
Read more on our blog to get interesting topics on business, law, and lifestyle.