When you die, you will leave behind more than loved ones and friends.
Assets including property, possessions and savings, all need to go somewhere. Because you will not be present to decide how all of these items are distributed, it is important to think realistically about who you trust and how exactly you want your Will to be carried out.
Prior to deciding how you write your will, consider your responsibilities to others. Are you a parent to young children? If so, your will is incredibly important because it determines who will look after your children when you are deceased.
If you are a spouse and you are the primary income provider, it is important to think about your spouse’s financial welfare after you are gone. Writing a will is a good time to consider life insurance as a possible vehicle for supporting your family in the event that you die.
1. Take a look at your finances
Take a look at your financial portfolio. How much major property do you own? If you own houses and property, then consider how much equity you have in that property and where it is located.
Are these homes financed? How much is left to pay on your mortgage and other debts?
Determine what your net worth is and from there, you can determine whether you have enough major assets for it to be worth hiring an executor. You might have a number of family heirlooms and in that case, it might be more practical to simply put the physical possessions into a self-written will and then allow a trusted family member to serve as the executor of that will.
Find out more about valuing your estate
Do you own homes in multiple states or countries? If so, it is advisable to have multiple wills.
This is important because if you own property in multiple jurisdictions and someone decides to contest the inheritance conditions outlined in your will, then your will for one property might not apply to the other property due to the different laws in the state or country in which that property is located.
This is why it is important to research your jurisdiction prior to writing any legal testament.
Find out what the laws are where you live and whether it is necessary for a lawyer to draft the will or for the will to be registered with the office of the probate.
3. To write your own will or not?
If you aren’t experience or qualified to write your own Will, you are taking a risk, regardless of how much money you are saving.
You could have it prepared via a self-service company format, or if you will hire a professional lawyer to advise your situation and to draft the formal document.
Hiring a professional might seem costly, but with large sums of money, it is important to consider trusting someone with expert knowledge of the laws in your jurisdiction.
Consider this example: if you own a house in Spain and a cottage in the Scottish Highlands, you might require a separate will for each house given that they are located in different countries and a living will is subject to the jurisdiction in which it is prepared.
The inheritance tax might be higher on the property located in Scotland, but if you still have five years remaining on the mortgage for the Spanish house, is it more advisable to sell the home in Scotland and will the house in Spain to your eldest child or vice versa?
Tricky, isn’t it?
Another factor to consider is how much debt you carry. Depending on the country or state in which you reside, you will likely have to pay all of your creditors before you can bequeath property to your trusted survivors.
The main theme here is that every personal situation is different, and the laws surrounding your situation vary based on the state or country.
While the low cost of a standard form living will might be enticing, you might overlook enormously important laws or tax repercussions that will derail the plan you had in mind for loved ones after you pass. Likewise, it is important to assess your personal financial situation with a realistic eye for your assets and liabilities.
You might have a beautiful home and many possessions which are meaningful to you, but if you possess a large amount of debt or if you are overextended financially, then the cost of a formal will and legal executor will likely only further erode what little money is left over after your debt obligations are consolidated. These decisions are often challenging, but by being honest with yourself, you can spare your loved ones a great deal of turmoil after losing the most important thing: you!