What is a will?

A will is a legal document you use to name the family members, friends, and organizations you want to receive — either outright or in trust — the property you own at the time of your death. Wills aren’t just for rich people. Even if you don’t have a lot of assets, a will can still help ensure your estate is distributed according to your exact wishes. You can’t depend on family members to follow your instructions after your death, no matter how many times you remind them of who gets what. In fact, if you haven’t left a will, they may not have the legal right to make those distributions.

In addition to transferring your assets to your intended beneficiaries, a will typically appoints an executor or administrator to act as your personal representative and carry out the wishes you’ve expressed in the will. You’ll want to consider this choice carefully, especially if you have substantial assets. Naming a responsible family member or close friend is a common practice.

Another approach is naming joint executors, one of whom is an attorney who could play primarily an advisory role. In addition, it’s a good idea to name a back-up executor in case your first choice is unable or unwilling to serve. You also should be sure your designees agree to serve.

A will should also appoint a guardian for your minor children, if you have any. In fact, that’s a primary reason for drafting a will as soon as you become a parent. The choice of a guardian, like the choice of an executor, can be a difficult one, though, as it has the potential to provoke conflict — especially if you’re a single parent or both parents die at the same time.

Most wills also typically cover details such as funeral arrangements, the payment of debts, and specific small bequests to individuals or charities.

Inheritance tax
State inheritance tax, when it is due, is assessed on the value of your bequests and is due from the people to whom you leave your property. Some states may tax different classes of beneficiary at different rates. That means property you leave to your spouse or children may be taxed at a lower rate than money you leave to your brother or niece. Nonrelatives may pay an even higher rate. However, if you wish, you can specify in your will that your estate should pay all inheritance taxes. In that case, you should be sure there will be enough money available to pay those bills.

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