Doing a WILL can be one of the biggest gifts you can give your family. It allows them to grieve. It avoids family money fights after death. We must plan accordingly.
We've all been on calls for service where the family is fighting like crazy because someone didn't have a will and the kids both think they should get that prized possession. These must-have documents are key to financial strength to ensure that upon your passing, your wishes are carried out for your estate.
Last Will & Testament, which details how you'd like to disperse your assets and property, how you want your estate to be handled and divided once you pass away, how to preserve your wealth, and what are your wishes for that prized car of yours, or who gets the house and gun collection?
There are some key components and definitions of the will to cover:
- Executors - the person you designate to fulfill your wishes, aka pay your bills and disperse your money and property
- Guardian- the person who is going to raise any minor children in the event that your spouse has passed. You wouldn't want the state to pick this one
- Testamentary Trust - usually used to tell your estate how to treat giving assets to children, dictating how and when minor and adult children get your money
Nothing can cause fights within a family more than someone dying and there being money involved. Let the kiddos know before you die what they get. Don't let it be a surprise to them. This way there isn't any fighting about who actually gets that 1969 Ford Mustang or mom's wedding band.
Last Will & Testament
This document details how you want your estate to be handled and divided once you pass away. If you have kids, I am a big fan of the Testamentary Trust. I have a 6 year old and a 3 year old and if me and my wife die, I want to be able to control how they get access to our life savings.
The last thing you want to do is give them access to all the money when they turn 18 years of age. You know what happens in that situation....party, boats, vacations, and expensive toys. Just about everything you don't want my life savings going to .
The best way to explain how these can be set up is to explain how we have structured ours:
If me and my wife both die all of our estate goes into the "testamentary" trust and the children's guardian gets a certain amount for their basic living expenses while they are minors.
At the age of 18 my kids get access to any funds for college expenses...but wait...we're evil parents..a.k.a. mean a protective parents!! They only get money to pay for college IF they go to college and IF they pass their classes, otherwise the first year is a big foggy haze of parties and dropped/failed classes.
At the age of 30 they get access to half of what is left in the estate, but our evilness doesn't stop...(cue evil laugh)!!! They must first attend Dave Ramsey's Financial Peace University class prior to accessing any money!! We can see the looks on their faces now -- haha!!
If we've done things right, at this point our kids stand to inherit some very healthy chunks of change. If they are going to get that money, We want to put them through some sort of financial training to teach them how to make this money a blessing and not a curse. If they blow it after that....well you can only lead a horse to water right!!
At the age of 40 they get the rest. Why 40? Because at 40 they have seen the heartaches that money can cause. They have likely had a friend or two go through a divorce (or they might have even done so) and seen how money can affect marriage. In other words, most 40 year-olds are in a place, maturity wise, to be able to handle money.
Love you Zach and Kylie :-)!!!
This is just an example of how we have ours set up to show how customized this can get. It also illustrates that this is not just for minor kids, but our adult kids as well. Again this is all about love and the gift you could be giving your children and maybe even your grandchildren.
A Living Will details how things should be treated while you are still alive. The four components of a living will are:
- Medical Power of Attorney - This is someone you designate to make medical decisions on your behalf if you can't make them. Imagine you are in a coma. Who tells the docs how to treat you?
- Power of Attorney - This one is a biggie and is also someone that you trust with everything in your life. Why? Because if you are medically incapacitated this person will access your financial accounts to help pay for bills and any other financial activity. You don't want someone taking your savings account and going to Hawaii for a week right? Who you pick as a Power of Attorney is very important.
- Medical Directive to Physicians - This document tells the physicians how you want to be treated in a life threatening situation. Do you want to be put on life support or have a feeding tube? Do you want to donate your organs? Do you want to be resuscitated? Sensitive issues, but important issues!
- HIPPA Release - This document gives the person the ability to get into any of your medical records.
If you are married then your spouse is usually the de facto on all of these, but it is important to name a back up to all of these. Why? Lets play our favorite game in law enforcement. What if scenarios!!! What happens if you AND your spouse are in a wreck and you're both in a coma. Who makes the decisions now? Without a backup........Oh Uh!!!!
For the single folks, you still need a back up just in case something happens to your primary on a Monday and you get into one of these situations on a Tuesday. You have to plan for these scenarios just like we plan out and picture how we are going to respond to each call for service. Play those what if games!
The first place to start with obtaining these documents is through your police or fire associations. Most of these organizations will help you with these documents and even do them for FREE (that's one less excuse not to do them).
If you don't have access to a free will, click on the get started button below to get your state specific will started today!!!
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