5 Things All Parents Need to Understand About Wills
May 2, 2017
Research shows that more than half of Americans do not have a will. While they may not be the most popular element of planning for many, wills are critical components of estate planning. In particular, wills are especially important for parents. In a way, your will is the last thing you get to “say” to your children. What you “say” within that document can have a potential lifelong impact.
You may think you understand wills and how they’ll impact your children, but there are critical elements of wills and how they can impact your family that you should keep in mind. Here are five that are particularly important:
- They ensure your wishes are met. If you don’t have a will when you die, there’s no guarantee your children will be cared for by the person of your choosing, or that your money will go to the people you want to receive it. As mentioned above, your will is your last chance to “say” something to the people you love. That includes critical decisions that, left undocumented, may not be made in accordance with your wishes.
- The tax implications can be confusing. Many parents are confused about the wills and the potential tax ramifications for their children if they do not wait until their passing to bestow funds. In reality leaving money to your children may not incur as much in tax as you’d think. The lifetime gift tax exemption is $5.25 million as of 2016 per person.
- Communication is key. Communication in advance with your children can avoid unnecessary family drama after you’ve passed. Losing a parent is a stressful time for everyone, and with added stresses surrounding gifts, money, etc, family squabbles or even relationship-altering arguments can ensue, unless there is a will to clearly make decisions.
- Choosing a potential guardian for your children is important. Sometimes your first instinct isn’t always the best decision. Perhaps your intended guardian wouldn’t want the additional responsibility of becoming a caretaker for your children. Or perhaps there is information about his or her situation that could change how they care for your child(ren). When making that decision, it’s important to ask and answer questions between you and your spouse, as well as any potential guardians, to ensure that you have made the right choice in the unlikely event of your passing, and that everyone involved is comfortable with that decision.
- Trusts can be a viable option. Younger children can be left their inheritance in trust so that they do not immediately spend every penny once they turn 18. Testamentary trusts can include language about when a child can actually take their inheritance (i.e. half at age 25 and the remaining half at age 30) with income for life, etc.
Taking the time now to set forth your wishes and document them in a will is an important step for you as parents. Call our office at 235-5885 to talk more about your needs and what estate planning documents are most important for your family. We’re here to help!
Related Topics: Estate Planning
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