Updated: Nov 15, 2019
Right now over 70 percent of Americans do not have a will. That’s about 200 million people. Why? “Too busy”, “Gonna get around to it”, and “Can’t afford it” are the top three excuses people give. Give me a break! I am not talking about single homeless people with nothing to lose. I am talking about Middle America: your neighbor, your friend, or you. The wealthy have wills, trusts, and estate planning in place because they understand the importance and stakes of protecting their estates, their personal wishes, and their children.
The higher one’s level of fiscal literacy and financial education, the more likely one is to have these important elements in place. Mind you, I’m talking about fiscal literacy and financial education—not intelligence. I have a very smart friend with an MBA and degrees in chemistry and engineering who told me that a will has been on his to-do list for years. He falls in the gonna-get-around-to-it category.
Without exception, one of the biggest mistakes I see in personal finance is the lack of a will that has been properly drafted by an attorney in one’s home state. You don’t just need a will, you need the right will. Hear me loud and clear: your California will is insufficient in Texas, and your Texas will will not serve your wishes in the way that you want in Florida. The thirty-dollar will-writing software program that we can all buy at Wal-Mart will not get the job done because each state has its own probate, conservator-ship
, and intestate succession methods and procedures. This point has been driven home to me by at least three of the country’s leading estate planning attorneys who have been enriched by probating estates with improper will and trust structures.
My sister, who is a top attorney in Michigan, will not give family members freebies on their wills because she’s busy and we live in Texas. Don’t be cheap on these important financial documents. You should expect to pay a few hundred dollars to protect your estate, your family, and your peace of mind.
Parents, if you have children, you should write a will in order to appoint guardians for your minor children and trustees to manage their property. In some families, there may not be a good choice as to who should get the kids if something happened to both parents; however, it is critical to press on and select the best possible choice. This one difficult choice shuts many families down altogether, and they never make a decision and form their will. The stakes are too high to drop the ball here. If you do not leave a will, the court may appoint a guardian—even someone who might have been one of your last choices. I cannot imagine a worse event than our kids being awarded at the court’s discretion. We all owe it to our families to have this done the right way. Naming a guardian for your minor children is one of the most important considerations in your will. If only one parent dies, the surviving parent will remain responsible for the children; however, things can get challenging if mom and dad die at the same time or if a surviving parent remarries. Again, if you do not name guardians for your minor children, the court will decide who takes custody of your kids.
Your will spells out who will get your money and who will get your kids, but those choices do not have to be one and the same. Your will can also prevent minor children from inheriting real estate by themselves. Although kids have the legal capacity to own property, in most cases they do not have the maturity to manage real estate. If your kids inherit a share of your home, business, or other property, there is a possibility that your spouse will not be able to sell it, rent it, or even restructure the loan without a court order. Court orders can be expensive, time-consuming, and stressful for everyone involved. Children usually do not inherit community property in the absence of a will, but they do inherit a share of your separate property; because of this you must be protected.
What if you died right now without a will? Are you willing to leave your family and leave them a mess at the same time? Trust me; you don’t want to do that!