Planning a Will is crucial for protecting your loved ones. You don't want your family and friends squabbling over your assets like seagulls fighting over a French fry. By having a Will, you can clearly state who gets what, minimising annoying family disputes. Plus, it ensures that your wishes are carried out even when you are not around to make sure everyone plays nice. Oh, and let's not forget about avoiding probate. And, here's the best part: Will planning can even save you from the wrath of the taxman. By strategically distributing your assets, you can minimize taxes and potentially leave more for your loved ones.
What is Will planning?
But before we delve into the hows and whys, let's first understand what will planning actually means.
Defining a last will and testament: A last will and testament is a legal document that outlines your wishes regarding the distribution of your assets after you kick the bucket. It's like your final goodbye message to the world, except it's all about the money.
Determining assets and beneficiaries: Remember that old coin collection your grandpa left you? Or the vintage car you've been cherishing all these years? When you are planning your will, it's essential to make a list of all your assets and decide who gets what. And no, you can't give away your cat as part of your asset distribution plan.
Appointing an executor: Think of an executor like the boss of your will. It's someone you trust to carry out your wishes and handle all the nitty-gritty details after you're gone. Choose wisely, my friend! You don't want your crazy cousin who still believes in conspiracy theories to be in charge of your earthly possessions.
Consider a living will or healthcare directive: Now, this is where things get interesting. A living will or healthcare directive is a legal document that spells out your medical treatment preferences if you become incapacitated. It's like a cheat sheet for your loved ones and doctors, so they know exactly what to do when life throws a curveball at you. Will planning may not be the most exciting topic for dinner conversations, but trust me, it's important.
How to start Will planning?
First and foremost, Will planning is a way of protecting your loved ones. Think of it as your final act of love, where you ensure that your assets are distributed according to your wishes. No one wants their hard-earned money to end up in the hands of that distant cousin who hasn't spoken to you in years, right?
Besides protecting your loved ones, Will planning also helps you avoid the dreaded probate process. Trust me, you don't want your assets to be stuck in legal limbo for months, or even years. By planning your Will properly, you can make sure that your loved ones receive their fair share without any unnecessary delays.
Here's how you can kickstart your Will planning journey:
First things first, assess your assets and debts. Take a good hard look at what you own and what you owe. It's all about those balance sheets, baby! Next, make a list of beneficiaries. Who do you want to leave your hard-earned assets to? This is your chance to reward your favourite niece or nephew (or maybe punish that distant cousin we mentioned earlier).
Then comes the exciting part - choosing an executor you trust to carry out your wishes. Consult with an attorney, they’ll guide you through the process and ensure your Will is legally sound. Once the legal stuff is sorted, it's time to draft and finalise your Will. This is where your wishes become official. Feel free to add a secret clause that requires your family to do the Macarena at your funeral. It's your will, your rules! Last but not least, don't forget to review and update your will regularly. Life changes, and so do your assets and beneficiaries.
Common mistakes to avoid
Not having a Will: Who needs a Will when we can just let the universe decide everything, right? Well, not really. If you don't have a Will, you're basically inviting chaos to your doorstep. Your loved ones might end up fighting over your belongings, and honestly, we've all seen enough family drama.
Neglecting to update the Will: Ah, the good old "set it and forget it" approach. Life changes, people come and go, and so do your assets. If you fail to update your will, you might accidentally leave your ex-spouse as the sole beneficiary of your estate. Trust me, that's not an invite to a fun party. Failing to involve an attorney: Who needs a fancy attorney when you can just wing it, right? Wrong. Will planning is not a DIY project that you can tackle on your own. Legal jargon, complex estate laws, and potential loopholes are just waiting to trip you up. By involving an attorney, you not only ensure that your will is legally sound but also save yourself from any future headaches.
Forgetting to consider digital assets: In this digital age, our lives are intertwined with technology. From social media accounts to online banking, we've got a whole digital universe to manage. But guess what? If you forget to include your digital assets in your Will, good luck to your loved ones trying to access or manage them.
(Viral Bhatt is the Founder of Money Mantra, a personal finance solutions firm)
