A will is a legal document outlining your final wishes and instructions for the distribution of your assets.
It is also important to set up a will because you may become incapacitated or die without an estate plan. Many people have misconceptions about wills, thinking they should outline all the details of their financial life and personal wishes. However, most of your will should focus on what happens when you are no longer around, leaving those things for your executor to handle after you die. You can only use certain types of formulas in a will because certain formulas require special forms or legal requirements that need to be met for the document to be valid. These formulas are best found by consulting an estate planning lawyer who focuses on creating wills for clients.
The first type is the simple formula. This formula gives your children and spouses most of your estate, with some left for the grandchildren. You put this formula into place by simply leaving most of your estate to your children and spouse in equal shares through a term such as “to my children equally,” or you can allocate specific amounts to each child and spouse. The second type of formula is the alternate or conditional formula. This formula is used when there are special circumstances in your family, such as a divorce settled before you die. With this formula, you leave a certain sum to your ex-spouse and what remains in the estate to your children and spouse equally. This formula is usually only used if there has been hatred or an especially contentious divorce. Still, it can be very effective for keeping things peaceful among family members after you are gone.
Four Main Types of Wills:
1. Simple Will:
A simple will is a very basic will. It simply states who gets what and how much, but it does not indicate any direction as to how the assets were acquired or how they are to be distributed. It is often used by people who have not been married long and only to outline the basic terms of a will and not the financial aspects. This type of will does not allow for deviation or manipulation of the terms for personal gain, but it does ensure that there are enough provisions in place to pay off debts or support your dependents after you die. For example, your simple will may state that your estates go to your daughter and that you desire to be cremated. You would not want a friend or relative not related to your family to be able to keep some of the money that should go toward the care of your other children.
2. Testamentary Trust Will:
The testamentary trust will be a great way to ensure that your money is distributed as you wish and not as someone else wills it. You can set up a trust through a will that states that you desire to be the trustee of your estate and then select beneficiaries to receive those assets. You can require that the assets remain invested in certain accounts or companies or distributed in a certain way. In addition, you can name someone to take over your role as trustee after your death. This type of will is an extremely effective way to keep your money protected and not fall into the hands of someone you do not want to receive it.
3. Joint Will:
The joint will is a great way to leave assets to your partner without having to get separate wills for each of you. You can state that the entire estate belongs to your partner or a certain percentage of the estate or simply list the assets that each of you would like from the estate. This is an effective and flexible will and is great if you have lost all the copies of your original will and know that it has not been updated in years.
4. Living Will:
A living will is a great way to ensure that your wishes concerning your death are known. You can call someone to make decisions for you if you are in a coma or have lost all mental function, and you can direct medical professionals to remove certain types of life support if you are unable to communicate with them. This type of will is used in addition to your main will, ensuring that your family’s wishes and yours remain intact at all times.
A will is a legal estate planning document that outlines the distribution of your assets for your dependents. It should leave all details about your finances to the executor after you die. A will can serve as a great tool for ensuring that you are leaving the correct amounts of funds to each beneficiary, and you can use certain formulas to ensure that you are not leaving more money than is needed in the system.