Guide: 9 Considerations Before Creating your Will

Creating a will is a crucial step in managing your legacy and ensuring your wishes are respected after you're gone. While the process may seem daunting at first, breaking it down into manageable steps can make it less overwhelming. This guide will walk you through the key considerations to keep in mind as you prepare to create your will.

1. Take Stock of Your Belongings

Before drafting your will, it's essential to create an inventory of everything you own. This list will serve as a foundation for your estate planning process. Your inventory should include:

Real estate (your home, vacation properties, or land)
Bank accounts (checking, savings, money market accounts)
Investments (stocks, bonds, mutual funds)
Digital assets (including cryptocurrency, online accounts, digital photos)
Vehicles (cars, boats, RVs)
Personal items (jewelry, artwork, collectibles, family heirlooms)
Pets (while they're family to us, legally they're considered property)
Life insurance policies
Retirement accounts (401(k)s, IRAs)

As you compile this list, you might be surprised by how much you actually own. Take your time with this step – it's better to be thorough now than to realize you've forgotten something important later.

It's important to note that not all assets should be included in your will. Some assets, known as non-probate assets, typically bypass the will and are transferred directly to beneficiaries. These often include:

Retirement accounts
Life insurance policies
Payable-on-death (POD) accounts
Transfer-on-death (TOD) accounts
Certain bank or brokerage accounts

For these non-probate assets, you'll need to fill out separate beneficiary designation forms. Make sure to keep these forms up-to-date as your life circumstances change.

2. Choose Your Executor

Selecting an executor is one of the most important decisions you'll make in your estate planning process. Your executor will be responsible for managing your estate after you pass away, which includes tasks like:

Notifying relevant parties of your death
Locating and managing your assets
Paying off any debts or taxes owed by your estate
Distributing your assets according to your will

When choosing an executor, look for someone who is:

Trustworthy and reliable
Organized and detail-oriented
Capable of handling potentially complex financial and legal tasks
Emotionally prepared to handle this responsibility during a difficult time

Many people choose a spouse, adult child, or close friend as their executor. However, you can also name a professional executor, such as a lawyer or bank trust officer, if you prefer.

It's wise to have a conversation with your chosen executor before naming them in your will. Make sure they're willing to take on this responsibility and understand your wishes for how your estate should be handled.

Additionally, it's a good idea to name a backup executor in case your first choice is unable or unwilling to serve when the time comes. This provides an extra layer of security for your estate plan.

3. Decide Who Gets What

Determining who will inherit your assets is often the most thought-provoking part of creating a will. Take time to consider not just who you want to include, but also what specific assets you want each person to receive.

Most people choose beneficiaries from among:

Immediate family members (spouse, children, grandchildren)
Extended family (siblings, nieces, nephews)
Close friends
Charitable organizations

As you make these decisions, consider factors like:

The financial needs of your beneficiaries
The sentimental value certain items might hold for different people
Any charitable causes that are important to you

It's often helpful to talk to your loved ones about your plans. While it might feel uncomfortable, having open conversations can prevent misunderstandings or hurt feelings later on. You might discover that your grandson is particularly attached to your vintage record collection, or that your daughter hopes to wear your wedding ring someday.

Remember, you can be as specific or general as you like in your will. You can leave everything to one person, split your estate equally among several beneficiaries, or specify particular items for particular people. The choice is yours.

4. Plan for Dependents

If you have minor children or pets, deciding who will care for them is a crucial part of your estate plan.

For children, you'll need to name a legal guardian in your will. This person will be responsible for all aspects of your children's care, including:

Providing food and shelter
Making educational decisions
Offering emotional support and guidance

Choosing a guardian is a deeply personal decision. Consider factors like:

The potential guardian's values and parenting style
Their financial stability and living situation
Their relationship with your children
Their age and health

As with choosing an executor, it's important to discuss this with your chosen guardian beforehand. Make sure they're willing and able to take on this significant responsibility.

For pets, you can include a pet clause in your will. This allows you to name a pet guardian and potentially set aside funds for your pet's care. When choosing a pet guardian, consider:

The person's experience with pets
Their living situation (do they have space for your pet?)
Their ability to provide the level of care your pet needs

Remember, pets are considered property under the law, so you can't leave money directly to them. Instead, you can leave money to the person you've chosen as your pet's guardian, with the understanding that it will be used for your pet's care.

5. Consider Charitable Giving

Including a charity in your will can be a meaningful way to support causes you care about and leave a lasting legacy. You can donate:

Cash
Investments (stocks, bonds, mutual funds)
Real estate
Personal property (artwork, jewelry, collectibles)

Charitable giving in your will, also known as a charitable bequest, can have tax benefits for your estate. It might reduce the amount of estate tax your heirs have to pay.

When including a charity in your will, be sure to use the organization's full legal name, address, and tax identification number. This ensures your gift goes to the right place. You might also want to specify how you'd like the donation to be used (for example, for a specific program or for general operating expenses).

Consider talking to the charity about your planned gift. Many organizations have planned giving officers who can help you structure your gift in a way that maximizes its impact.

6. Address Your Debts

It's a common misconception that debts disappear when someone dies. In reality, your estate will need to pay off your debts before distributing assets to your beneficiaries. Common types of debt that might need to be addressed include:

Credit card balances
Mortgage loans
Car loans
Personal loans
Medical bills

In your will, you can specify which assets should be used first to pay off debts. This can help ensure that meaningful assets you want to leave to specific people aren't sold off to cover debts.

If there aren't enough assets in your estate to cover all debts, some debts may go unpaid. In most cases, your family members won't be personally responsible for your debts unless they co-signed on the loan.

It's a good idea to keep a current list of all your debts along with your other important financial documents. This will make your executor's job easier and ensure all your debts are properly addressed.

7. Express Your Funeral Wishes

While funeral instructions aren't legally binding in the same way as your will, including them can be incredibly helpful for your loved ones. During a time of grief, having clear guidance about your wishes can alleviate stress and prevent potential conflicts.

Consider including information about:

Whether you prefer burial or cremation
The type of funeral service you'd like (religious, non-religious, celebration of life)
Any specific readings, music, or other elements you'd like included
Where you'd like to be laid to rest
Whether you'd like donations made to a specific charity in lieu of flowers

You might also want to consider pre-planning (and potentially pre-paying) for your funeral. This can lock in current prices and further reduce the burden on your loved ones.

Keep in mind that your funeral wishes should be kept separate from your will. Your will might not be read until after the funeral, so it's best to have these instructions in a separate document that your loved ones can access immediately.

8. Choose a Safe Storage Spot

Once your will is complete, it's crucial to store it somewhere safe and accessible. Some popular options include:

A fireproof, waterproof home safe
A bank safety deposit box
With your executor or lawyer
Filed with the local probate court (if your state allows this)

Wherever you choose to keep your will, make sure your executor and at least one other trusted person know where to find it. If your will can't be located after your death, the court might assume you died without a will (intestate), which could result in your assets being distributed according to state law rather than your wishes.

Along with your will, consider creating a "letter of instruction" that includes:

A list of important documents and where to find them
Contact information for your lawyer, financial advisor, and other important professionals
A list of your digital assets and how to access them
Any other information that might be helpful for your executor

9. Plan for Changes

Life is unpredictable, and your circumstances are likely to change over time. Build flexibility into your plan by:

Naming backup beneficiaries for each of your assets
Choosing a secondary executor
Including contingency plans (for example, what should happen if you and your spouse die simultaneously)

Experts recommend reviewing your will every 3-5 years and after any major life changes, such as:

Marriage or divorce
Birth or adoption of a child
Death of a beneficiary or executor
Significant changes in your financial situation
Moving to a different state

Remember, you can always update your will as your life circumstances change. This can be done through a codicil (an amendment to your existing will) or by creating an entirely new will.

Creating a will is an act of love and responsibility. By thinking through these considerations and creating a comprehensive estate plan, you're taking an important step in securing your legacy and providing for your loved ones. While the process might seem complex, remember that you don't have to do it alone. Consider consulting with a financial advisor or estate planning attorney to ensure your will accurately reflects your wishes and complies with all relevant laws.

Disclaimer: Estate planning may implicate both state and federal laws, and estate planning needs will differ based on personal circumstance and applicable law. We are not a law firm and our services are not substitutes for an attorney’s advice. The information here is provided for educational purposes only and is not intended to provide, and should not be construed as providing legal or tax advice. This information is general in nature and is not intended to serve as the primary or sole basis for investment or tax-planning decisions.