How to Write a Will That Protects Your AssetsHere's how writing a will with asset protection can reduce stress for your family and save them money.

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You might not know you have a default estate plan, but everyone does — it’s called intestate succession, which means that the state decides what will happen to your property if you don’t leave a last will and testament. If the state takes over, it will likely name your spouse, children, parents or siblings as inheritors — but it might take years for them to inherit.

To have a say in who your assets go to, it’s essential that you write a will. Writing a will doesn’t require an attorney, but you might consider consulting with one who specializes in estate planning to help you determine your best course. If you learn how to write a will now, it can benefit you later. Here’s how to ensure your assets end up with your chosen beneficiaries instead of going toward taxes, probate and other costs that result from death.

1. Name an Executor

The executor of your will is the person who takes charge of your assets — he pays your creditors and taxes, files required documents with the court and distributes your assets to your heirs. Because the executor will oversee the distribution of your assets, make sure you name someone you trust.

2. Figure Out What to Include in Your Will

When you write your will, you need to designate the people who should receive your property and on what terms they should receive it. You can leave assets to your heirs either outright or in a trust.

If you leave someone something outright, he can spend it on anything he chooses — but the beneficiary’s creditors can seize the asset to satisfy any debt he owes. For example, if you leave $300,000 to your son outright — and he gets divorced and ordered to pay $500,000 to his ex-wife — that $300,000 might end up going to his ex-wife.

Consider leaving money to your beneficiaries in a testamentary trust, which enables you to specify how distributions are made. For example, if you allow distributions only for health and education purposes the trustee — the person who oversees the trust — can’t make distributions to the beneficiary’s creditors.

Finally, you should name a guardian — or the person who will care for your kids — for any minor children in the event of your death. It’s assumed that if your spouse is alive he will keep the children, but if you both die, it’s important to name the person who will take charge.

Related: Your Estate Planning Checklist — How to Create a Financially Sound Estate Plan

3. Know About Asset Protection Limitations

Your executor is duty bound to pay your creditors, including the IRS. Creditors can file claims against your estate if you owe money on credit cards or you didn’t pay your income taxes. If the court deems the claims valid, it will order your executor to pay them.

The good news is it’s unlikely that money from your assets will go to pay estate taxes. As of 2017, only estates with combined gross assets and prior taxable gifts exceeding $5.5 million require filing an estate tax return.

Find Out: How to Minimize Your Estate Tax

4. Execute Your Will

After you finish writing your will, make sure you execute it properly. Every state in the country requires two adults — who aren’t beneficiaries — to witness a will.

You don’t have to have your will notarized as long as you and your two witnesses sign it. Most states allow you to attach a self-proving affidavit to your will, which does need to be notarized after you and your witnesses sign it. The affidavit enables your will to be “proven” to the probate court without your witnesses having to testify.

It might be a good idea to have an attorney look over your document — even if you use a will template. A qualified lawyer can ensure that your will meets all of the requirements of your state.

Related: How to Close a Checking Account for a Loved One Who Died

Will Alternatives

If for some reason you don’t want to write a will, consider designating beneficiaries on as many accounts as possible if you want to avoid probate for some of your assets. Add beneficiaries to your bank accounts, brokerage accounts, retirement plans and life insurance policies so those assets will go directly to them.

You can also create a revocable trust — or living trust — to hold your assets. This type of trust enables you to change any of your wishes as often as you like. Although a revocable trust might be more expensive to create than a will, it provides you with a lot of flexibility — you can adjust its provisions and enjoy the security of knowing that your estate will be transferred upon your death.

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