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A 7-Step Guide to Creating a Will

Planning for the management and transference of your legacy can be a sensitive and difficult topic, but it’s one of the most important components of wealth management. The contents of your will dictate how your assets are distributed.

It’s never too soon to start planning your will, but it’s especially important if you have minor children or own a business. When you’re ready to start preparing your will, there are a few steps to consider.

1. What Goes In Your Will

Start by taking stock of your assets — your home, cars, brokerage accounts, artwork, jewelry, and so on. You should note the approximate value of each asset, how it is titled, and whether the asset has a beneficiary designation.

If you’re married, you and your spouse will need separate wills. You’ll need to consider that joint assets or assets with beneficiary designations may pass outside of your will, so these assets will need to be addressed in a manner that is consistent with your will and overall estate plan.

2. Who Inherits Your Assets

We like to tell our clients that the government already has a plan for the distribution of your assets — if you want it to go differently, you’ll need to craft that plan yourself. Your will is only one part of that plan, but it’s crucial.

For most people, deciding which of your assets will go to whom is pretty straightforward. Most of it will likely go to your immediate family — spouse, children, and grandchildren. Make sure that you designate alternate beneficiaries in case your first choices do not survive you. And if you’re leaving money to someone outside your family or you’re excluding a family member, ensure that the language is clear to minimize the chance of an argument after the fact.

3. Choose a Personal Representative

In your will, you’ll typically name a personal representative (referred to as an “executor”) to carry out the terms of your will. They’ll oversee the probate process, the distribution of your assets, and the payments of any debts and taxes that have to be taken care of. Make sure you discuss this role beforehand with whomever you choose so it doesn’t come as a surprise and they are prepared to assist with the administration of your estate.

4. Choose a Guardian

If your children are minors, you’ll have to consider guardianship. In all likelihood, their other parent will take guardianship of any minor children, but you should consider naming a backup guardian in the event both parents are unable to care for minor children. This is a decision that shouldn’t be taken lightly by you or the guardian — take the time to discuss what guardianship will entail beforehand.

5. Choose Someone to Manage Your Children’s Property

If you choose to leave assets to minors like your children or grandchildren, you’ll need to appoint someone to manage those assets, such as the trustee of a trust.

If you’re leaving substantial assets, a trust is usually the best option. You can specify what happens to those assets, whether they can be sold, who’s in charge of managing them, and when ownership transfers to the beneficiary. A trust may be the preferred option even if your children or grandchildren are adults.

6. Create and Sign the Will

For writing the actual will, talk to an attorney who has experience preparing estate plans for the type and amount of assets you plan to leave to your beneficiaries. The specific language of the will is very important to avoid confusion and disputes, so it’s vital that you spell out exactly what you intend for the distribution of assets after you’re gone.

You should also employ a professional financial adviser to help you navigate the tax burden of your estate. The taxes on your estate can be substantial — currently 40 percent of any funds over your lifetime exemption amount ($11.7 million in 2021). There is an additional tax for generation-skipping transfers, so you’ll need to plan accordingly.

7. Store it Safely

Finally, make sure your will is signed in front of witnesses, properly notarized, and stored somewhere safe and easy to access. Tell a few trusted family members or close friends the location of your original will— if no one can find the will or verify its authenticity after your death, a nasty legal battle might follow.

Talk to First Western Trust Bank

The larger and more complex your estate, the more important it is to seek advice from experienced professionals when preparing your will. An experienced financial advisor can examine every aspect of your financial situation and work with you and your attorney to put a will in place that’s tailored to your exact wishes. If you’re ready to start taking your estate planning seriously, contact First Western today!

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