Lots of people think they’re too young or too poor to have an estate plan (will, power of attorney, etc.). As discussed in a previous blog, there are a lot of reasons people use to avoid thinking about these things. Still, people want to know: “Do I actually need a Will?”
The short answer is always: YES, YES, YES, YOU NEED A WILL. And you also need a power of attorney.
I have only told one person in 10 years of practice that she could probably get away without a will. She was 19, in college, had a small bank account that listed her mom as a beneficiary, and didn’t have any kids. Of course, that changes as she get older, gets married, buys stuff, and has kids. Regardless, she definitely needed a power of attorney. In the end, she got both because it just made good sense to her to be organized. An old soul, perhaps.
If you’re not convinced, here are some guidelines in making a decision:
When do I need a will? You absolutely need a will if you:
- Have minor children
- A will is the only way to nominate a guardian for children under 18.
- Own real estate
- Your estate must go through probate if you own real estate, which means you will want to direct how the probate should go instead of relying on state law.
- Owe people money
- Your estate should go through probate to deal with creditors (people you owed money to while alive), and probate is much easier with a Will.
- Want to disinherit a child
- State law includes your children by default. If you don’t want them to get money from your estate – for whatever reason – you need to clarify that in a Will.
- Want certain people to get certain parts of your estate (e.g., your dad’s Rolex to your nephew)
- If you don’t indicate in a Will (or list incorporated by your Will), you leave your heirs to argue about who gets what. Lawyers are paid a lot of money to argue about who gets STUFF, most of which doesn’t have much monetary value!
- Have over $100,000
- State law implies that a probate is required to transfer assets over $100,000. However, I have had to open probates to transfer bank accounts under $100,000, which was required due to a bank policy and not a law. So – this is a guideline and not a hard-and-fast rule.
- Care about your family
- That’s kind of a trick answer . . . but a Will makes everyone’s life easier after you’ve gone so – yeah, you need one if you care about your family.
When do I need a power of attorney? Everyone over the age of 18 should have a power of attorney. Even if you have $20 in your bank account (or don’t have a bank account) and you are “never going to become incapacitated” (if only that were within your control), you need to appoint you trust to make decisions for you if bad things happen. For example: if you’re in a car accident and over 18, sometimes your parents can’t even make decisions for you without a power of attorney. The same is true for a married couple – not always do banks or hospitals discuss matter with a spouse without a power of attorney! Crazy but true.
That’s the long answer.