Understand these guidelines for writing a last will and testament and you could potentially do the process yourself, saving money along the way.
Let’s just point out the elephant in the room here: No one wants to think about writing a last will and testament. All sorts of other unpleasant thoughts about our mortality creep in. There’s another way to look at it, though. You’re actually doing yourself and your loved ones a favor by leaving an estate plan for what happens with all your stuff (yes, including your money) once you’ve moved on to that great hereafter.
There are two philosophies around personal financial planning: (1) make a lot and spend everything you earn, and (2) create generational wealth to pass on to the people and causes you care about most.
If you are in the latter group, you need to pay attention to how your wealth will be passed on. A valuable piece in building that puzzle of generational wealth is writing a last will and testament. There are even ways you can save money in the process. Still, you must take care, because some of these strategies are a bit counter-intuitive. The following are some essential parts of what to know for writing a last will and testament to save money.
Your 5-step guide to writing a last will and testament
Creating a legally binding will does not need to be as foreboding as it sounds. But those two words – “legally binding” – are essential components. If you make a will that serves no lawful purpose, you’ve wasted your time and created headaches for your heirs. And though some of them may deserve a headache or three, this isn’t the place for it.
Here is a step-by-step of what to think about to save money in writing your will.
- You can save money upfront by creating a will with an online service: Many people appreciate the idea of saving every dime possible when making a will. This thought process makes sense as anything involving lawyers can get costly in a hurry. There are online services that allow you to make your will more efficiently, or you could attempt creating a DIY will but beware of the downfalls. . .
- Saving money up front doesn’t mean saving more money in the end: Whether you try a DIY will or an online service, you must be sure the will abides by federal and state laws. If it doesn’t, you could be setting up your heirs for serious legal disputes and exorbitant legal fees in the process.
- What can lawyers do for you: There is a lot to be done with writing a last will and testament. The more you want to accomplish, the more complications there are in having your wishes carried out. Weighing your options can be challenging, but decide what you’re trying to execute and hire a lawyer if you need to. Their legal expertise can ensure that your wishes are carried out and will hold up according to state and federal law. If you still wish to go DIY or use an online service, research state, and federal requirements so you can do everything possible to conform to those needs.
- Decisions: There are more than a few decisions to make in writing your will when the time comes. You must choose your beneficiaries, an executor (often compensated by a percentage of the estate), guardians for children, and you need to be clear about your intentions. If you have more to say or would like to explain your decisions, it is wise to put it in a letter to accompany your will. You also want to make sure you have witnesses to sign your will and find a safe place to put it.
- Keep your will updated: No matter how old you are when you create your will, there is always time for your wishes to change. You should review your will every year or two, at least, to ensure everything remains aligned with your final wishes.
Creating a will you can be confident in is not always an easy task, and if you have a lot of assets, you may have even more complications than the average person is dealing with. If you are confident that you can create a legally binding document on your own, be sure you are covering all your bases. Otherwise, hiring a lawyer is a wise move.
Do you plan on seeking help for writing a last will and testament, or will you do it on your own?
Nancy Zambell, Chief Analyst of the Financial Freedom Federation, has spent more than 30 years helping investors navigate the minefields of the financial industry. Nancy's book, Make Money Buying & Selling Stocks is an introduction for new investors and a reminder for experienced investors on how to profit in the stock market.Learn More