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- A last will and testament is a legal document outlining someone’s wishes after they pass away.
- A living will is a similar document, with a few differences.
- You don’t necessarily need a lawyer to set up a will.
Setting up a will is one of the most crucial personal finance steps everyone should take. Wills establish where you’d like your property and assets to go after you die. Some wills can also determine how your property should be handled in case you’re incapacitated. Shockingly, just 42% of American adults have estate planning documents such as a will or living trust.
That statistic rises to 79% of Millennials and 64% of Gen-Xers without a will. If you’re currently without a will and you’d like to protect your assets after you pass, here’s how.
Why is a will important?
Wills are important legal documents, sometimes with many implications. Setting up a will is critical because there are several powers that come with them. Wills can distribute your property and money, forgive debts, and even name guardians for your children. These items are important to determine before you pass because, without a will, your personal requests could be denied in the light of state laws.
“In other words, if you don’t have a will, the state has one for you,” explains estate planning attorney Matthew Underwood. “Regardless of how old you are or how much wealth you have, would you rather have government officials dictate where your property goes or would you rather decide that for yourself?” asks attorney Matthew Underwood.
“Regardless of how old you are or how much wealth you have, would you rather have government officials dictate where your property goes or would you rather decide that for yourself?”
Depending on things like your health, financial status, and property values, a will can be crucial if you want your assets to go to someone after you pass away. A will created to allocate assets after you die is known as a last will and testament.
Last will and testament vs. living will
The idea behind a last will and testament is pretty simple. The last will and testament may determine guardianship for your children, give certain assets to certain people or groups, or divide your liquid assets into multiple inheritances. All of your financial details should be outlined in your last will and testament. The document should also clearly indicate who will receive your assets if one person is unable to do so.
There’s also another type of will, known as a living will. A living will outlines the medical care wishes of someone who is still alive but is unable to act on their own behalf. This legal document will let your loved ones know what you’d prefer if you are in a coma or vegetative state. Living wills can be helpful by allowing your family members to act on your behalf with your wishes in mind.
Technically, you do not need a lawyer to draft a last will and testament or living will. However, all do-it-yourself wills need to be notarized to become official. Because each state has its own laws regarding last will and testaments and living wills, it’s best to do your research before setting up a will on your own. There are also will drafting resources online to help you every step of the way.
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