One reason for having a will is to make sure your wishes are carried out. If you die “intestate” (without a will), your assets will be distributed by state law, not by your desires.
Having a will is especially important if you have young children. In your will, you can name guardians: the people you’d like to raise your kids, if neither you nor your spouse is able to do so.
When naming guardians, be practical. Your closest relatives—say, a brother and his wife—may not necessarily be the best choice. Remember, you are acting in the interests of your children.
Make sure to get the consent of your chosen guardians before naming them in your will. Also see that enough life insurance is in place so that the guardians can comfortably afford to raise your children.
Your estate planning should not end there. Other components to consider include:
* Trusts. Putting your assets in trust will help your heirs avoid the time and expense of probate. Assets kept in trust can provide funds for your heirs yet prevent your survivors from squandering their inheritance.
* Powers of attorney. Such powers enable someone you name to act on your behalf. A “durable” power will remain in effect, even if you become incompetent.
* Beneficiaries. Life insurance, retirement accounts, and payable-on-death bank accounts will go to the people you name on beneficiary forms, without going through probate.
* Health care proxy. This document authorizes someone to make medical decisions for you, if you can’t make them yourself.
* Living will. This instrument states whether or not you’d want life-sustaining efforts.
Review all of these documents every few years to make sure they’re up to date, in line with your current wishes.