Q: A friend of mine recently passed away. They didn’t have a will or estate plan, and it created an unfortunate battle between their long-term partner and their estranged family. Would having a will have prevented this?
A: I’m sorry to hear of your friend’s passing. While having a will won’t necessarily prevent long-lost relatives from staking a claim on assets, it will certainly help make your wishes and intensions clear. I recommend everyone have a will and other basic legal documents in place.
August is National “Make a Will” Month, and it’s a great annual reminder to update your will if needed and create a will if you don’t have one already. A will is an important estate-planning document that can help you transfer your assets with ease. Having a proper will can make the difference between a smooth transfer of assets and a probate nightmare.
Let’s learn more about what wills are, why you need one, and some tips on how to create or update your will during National “Make a Will” Month.
What Is a Will?
A will, or a Last Will and Testament, is a legal document that outlines your intention for the distribution of your assets after your death. It is an integral part of a comprehensive estate plan and helps your loved ones avoid legal and financial loopholes and know what to do with your assets. These explicit instructions are essential and can help everyone avoid a lot of headaches. Having a current, valid will may be even more important in the LGBTQ+ community, depending on your single, married/partnered status and the health of your relationship with your family.
Wills vs. Trusts
When you’re researching estate planning documents, you have likely come across both wills and trusts. While both documents can help dictate what you want to do with your assets when you’re gone, there is one main difference.
The primary difference between a will and a trust is that a trust (if it’s a stand-alone trust), takes effect as soon as it’s created and signed (assuming you then re-title assets in the name of the trust), while a will does so only after you pass away.1 Although in certain situations, a trust can also be created as a function of your will, and not actually funded until after you pass. This is known as a testamentary trust. There are also two different types of trusts to consider: irrevocable and revocable.
Irrevocable trusts are trusts that can’t be changed or canceled after they have been signed.
Revocable trusts can be changed, and the grantor (the person who creates the trust), has the right to change the terms or even end the trust. Some other differences between wills and trusts are that a will requires probate to transfer items to beneficiaries, but trusts can avoid probate. In addition, wills are public record and trusts can generally remain private. Because a trust takes effect right when it’s created, it can be used if you become incapacitated and unable to make decisions independently.
Do You Need a Will?
We face so many financial obligations every day, so should creating a will be at the top of your list? Most financial experts say yes, you need a will. Even if you don’t have substantial assets to transfer, a will can still help your family feel more confident about your wishes. In addition to making the transfer of assets easier, here are a few benefits of having a will2:
- It allows you to distribute your property and protect your loved ones after you pass away.
- It can provide peace of mind to you and your family.
- You can plan for those in your care (e.g. naming a legal guardian for your children or pets).
- It may prevent family conflict.
- It can eliminate confusion over assets.
- It can ensure that your assets go to the people you want to have them.
- It can help you build a lasting legacy.
- You can use your will to benefit charity, including those that specifically benefit LGBTQ+ organizations, if desired.
These are just a few of the many benefits of having a will. To celebrate National “Make a Will” Month, let’s look at how to create a will.
How to Create a Will
Creating a will can be a straightforward process, or it can involve the help of attorneys and financial advisors. Also, the process will depend on where you live because every state has different requirements for creating a will.
Generally, the first step in creating a will is to determine what you want to include. You should include instructions for passing along your assets after your death, including ownership and other instructions. You may consider working with an attorney to ensure that your will contains everything it needs.
Next, you will likely sign your will in front of two witnesses, and these two witnesses will also sign your will. Some states require a self-proving affidavit that you sign in front of a notary, other states require your will to be notarized, and some states don’t require any special self-proving documentation as long as you sign and witness your will correctly.3
As part of your estate planning, you’ll also want to be sure to revisit beneficiary designations on any retirement accounts and insurance policies, as these assets bypass your will and pass directly to named beneficiaries.
Whether you have $10 worth of assets or $10 million, creating a will is a good idea to give your family more guidance after you pass. Wills help make the transfer of assets easier and give you and your family more peace of mind. Consider creating or updating your will this August for National “Make a Will” Month! If you have any additional questions about your planning or would like a referral to a qualified local estate attorney with experience helping LGBTQ+ clients, please feel free to contact me.
Sources:
1https://trustandwill.com/learn/what-is-a-will
2https://www.freewill.com/learn/3-reasons-to-make-a-will-this-make-a-will-month
3https://www.nolo.com/legal-encyclopedia/california-make-will-32181.html
Jeremy R. Gussick is a Certified Financial Planner™ professional affiliated with LPL Financial, the nation’s largest independent broker-dealer.* Jeremy specializes in the financial planning and retirement income needs of the LGBTQ+ community and was recently named a 2021 FIVE STAR Wealth Manager as mentioned in Philadelphia Magazine.** He is active with several LGBTQ+ organizations in the Philadelphia region, including DVLF (Delaware Valley Legacy Fund) and the Independence Business Alliance (IBA), the Philadelphia Region’s LGBT Chamber of Commerce. OutMoney appears monthly. If you have a question for Jeremy, you can contact him via email at [email protected].
This content is developed from sources believed to be providing accurate information and provided with the assistance of Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
Jeremy R. Gussick is a Registered Representative with, and securities and advisory services are offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.
*As reported by Financial Planning magazine, June 1996-2021, based on total revenues.
**Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2021 Five Star Wealth Managers.