A will directs who gets your property when you die. It also appoints a legal representative to carry out your wishes. Die without one, and the State decides who gets what irrespective of what you may have wanted.
Intestacy laws vary considerably from state to state. In general, if you die and your spouse and kids survive, your assets will be split between your partner and children. If you’re single with no children, the state is likely to decide who among your blood relatives will inherit your estate.
In Washington, if you die with no will and leave behind a spouse and children, the spouse gets all community property and half of your separate property. Children get the other half. If you die with a surviving parents and spouse, your parents get ¼ of your separate property, and your spouse gets the other ¾ of it and all of the community property.
If you have children you should have a will. If your children are under the age of 18 this gives you the opportunity to appoint a legal guardians for them. By appointing a legal guardian or guardians you ensure that your children are taken care of by whomever you believe is appropriate. Committing this to writing also allows you to have conversations with family members you might want to take on the responsibility to ensure that they are willing and able to do so.
Another reason it’s so important for parents to create a will that that the document allows you to dictate at what age your children are allowed to inherit. Giving a large sum of money to a child who has just turned 18 can be a bad idea on multiple levels. You can decide what your child or children are allowed to inherit at what ages.
You can also create a trust to deal with issues of inheritence. People have often heard the terms “will” and “trust,” but not everyone knows the differences between the terms. Both can work together to create a complete estate plan for you and your children.
One difference between the two is that a will goes into effect only after you die, while a trust takes effect as soon as you create it. A trust is an arrangement by which one person (a “trustee”) holds legal title to property for another person (a “beneficiary”).
A trust can be used to begin distributing property before death, at death or afterwards. A trust can allow a person to minimize gift and estate taxes. Most trusts deal with specific assets like life insurance or a piece of property, but not all of a person’s investments and possessions.
You can amend your will at any time. Changes must be put in writing. There are specific rules about how to amend a will for changes to be considered “valid” and enforceable. It’s a good idea to review your the document especially when your marital status changes. At that same time, it’s smart to review your beneficiary designations for your 401(k), IRA, life insurance policy and pension since those accounts are transferred to your named beneficiaries when you die.
A living will (commonly known as an advance medical directive) is a statement of your wishes for what life-sustaining medical intervention you want (or, just as importantly, don’t want!) if you become terminally ill and unable to communicate. It’s a good idea to complete a medical directive regardless of if you have children or not, as it answers tough questions that you may want control over and/or your spouse or family members may not feel comfortable making.