A will establishes how you want your assets and/or estate to be distributed after you have died. It is one of the most important legal documents you will ever possess for it not only tells your family and the state how your property should be divided, but it also issues very clear directives for the protection and custody of any minor children you may have.
You may not know it, but there are different types of wills — some that are more legally binding that others — and not all forms of wills are recognized in all fifty states.
Different types of wills
If you are planning to have your first will drafted, here are a few different types for you to consider:
- Simple or statutory will: This is a basic “no-frills” will designed to comply with the laws of your state. All you need to prepare a simple will is to fill in a template that can be found on your state’s website.
- Couple's Wills: Spouses or civil partners have three types of wills from which to choose. While very similar, each has key differences that are important to take into consideration before making your choice:
Reciprocal or mirror wills
Each spouse or partner has his or her own will leaving everything to the other person (hence “reciprocal” or “mirror”). They may also contain mutual beneficiaries should both partners die at the same time. After the death of one spouse or partner, the survivor can legally make changes to their will at any time.
Designed by both parties, a joint will leaves everything to the surviving spouse or partner and specifically outlines who inherits the assets of an estate after the second partner dies. No changes can be made to a joint will after the death of a spouse.
Containing identical provisions in two separate documents, a mutual will is similar to a mirror will, except it contains a promise that the survivor cannot change or alter the will after the death of the spouse or partner (as in a joint will).
- Pour-over Will: If you currently have a living trust, a pour-over will allows the trust to be named as sole beneficiary after you die. The result is that all property within your estate that has not been specified for distribution will be “poured” into your trust and then distributed privately. As it can be a daunting task to list every single item you own in a will, the pour-over will take care of it for you.
- Conditional or Contingent Wills: A conditional will specifies that the provisions of the will are only valid in the event of a certain event taking place (e.g., an heir reaching the age of 21). Should the directives of the will not be met — and there is no other will — your assets will be disbursed by the state as if no will ever existed.
- Living Will: A living will focuses solely on your medical care and life support in the event you become incapacitated. Not all living wills can be executed per your wishes should your desires be contrary to your own state’s laws, particularly with respect to euthanasia or other life-ending scenarios.
- Holographic Will: A will written and signed entirely by hand and unsigned by witnesses. This type of will is only valid in certain states.
- Oral Will: Oral wills are spoken testaments given before witnesses. Another will that rarely holds up in court.
The importance of having a will
A will is your way of letting your family — and the state — know how you want your assets distributed upon your death. It gives you sole discretion over the disbursement of items such as homes, cars, family heirlooms and anything else you’ve acquired over the course of your lifetime.
So why is this important? Because if you die without having a well-drafted will in place, the state will decide how your assets are to be distributed without regard to your wishes or those of your family. Having a will also benefits those you leave behind, by making your wishes legally binding. Nothing can cripple a once-close family quicker than battling over your possessions in court.
If you have minor children, a will lets you provide for their care. Making a will is especially important for people with young children, because it is the best way to transfer guardianship of minors. Even if you have children from another marriage — or adult children — your will can dictate the assets they receive, too.
Wills are flexible legal documents that can be amended at any time. In fact, it is a good idea to review your will periodically, and especially if your marital status changes. As you amend your will, be sure to review your beneficiary designations for your 401(k), IRA, pension and life insurance policies, too. Those accounts will be transferred automatically to your named beneficiaries when you die.
Finally, making a will is a very necessary and generally uncomplicated process that will not only protect your family after you are gone, but give you piece of mind while you are still around.