Why be Financially Literate? Knowledge is Power!

Do I need a Will

Many people know about the existence of wills, but not as many recognize its importance on time. Death is a difficult topic to deal with, especially when money interests are involved. However, the more we prepare ourselves for situations like these, the more the outcome will be to our liking and preferences. In case of death, don’t assume that your family (or whoever you decide to leave your assets to) will automatically receive your money. Many times it doesn’t work like that and you need to have a written statement in order to avoid surprises, confusions and family trouble!

A will implies writing a legal document which consists of several instructions that will be carried out after you die. Many people think that topics of this nature only pertain to elderly people. However, what if you die? Have you thought about who will take care of your children? Having a will is way to make sure your children will have the guardians that you please. It is also a way to decide who will manage your assets and how your property will be distributed.

Most of the times if you die without having a will, depending on the country’s regulations, an administrator will be assigned to handle your assets. Now you should ask yourself,  and if I do get a will or if I don’t and it’s up to you to understand the implications of each!

And If I do?...

Preparing a will is simple and it pays off. Having one will help reduce the possible costs and stress that dividing your assets may cause to your family.

A will allows you to name your beneficiaries (people who your assets will be transferred to), such as family, friends, or even an organization and also state how and when your assets should be distributed. An executor will take charge of managing your assets and distributing them as you stated in your will after you die. This same person may also pay the corresponding debts and taxes. Note, you should have trust in your executor.

You can either make a will on your own or obtain professional advice. Basic steps include:

  1. Organize yourself and make a list of what you have (assets such as bank accounts, stocks, bonds, real estate, and debts including the name and contact number of the person that you owe money to). You can include specific things, such as jewelry.
  2. If necessary, go over it with a close family member or friend to make sure that you have included everything. Meet and review it with your lawyer and get advice. Be sure to include everything. For example, if your child is under 18, you can nominate a candidate and/or guardian to manage the assets until he reaches certain age.
  3. Name an executor.
  4. Update your will. Check with an authority in your community on the subject of wills to ensure that you have a will that will stand up to review by a court.
  5. Keep in mind that you can always change the content of your will and in fact, you should review it once in a while to make sure it’s up to date. Besides regular review, you may want to have it adjusted in case of important events such as marriage, divorce, birth of new family members, significant purchases, retirement, etc.
  6. Keep your will to yourself and your lawyer, but make sure that your beneficiaries know where the will is located.
  7. Read more about making a will, elements of a will, naming a guardian and an executor, preparing a will, among others click here.
  8. A  will takes care only of those assets that you included and are titled with your name.

Note: Life insurance and retirement plans are not generally included in your will and they will be transferred according to what your instructions were when you purchased the insurance or established a retirement plan; however, these instructions can be changed at any time.

And If I don’t?...

Be careful! Generally, if you die your assets will be distributed among your partner (if married) and children, grandchildren, siblings, or close relatives. But equally your property assets can be transferred to the state. Depending on the regulations of your country, your property may be distributed as they wish. You might want to leave some money to a friend but if you don’t have a will, they will not receive any of your money!

Tip: Always consult with your lawyer which rules are applicable in your country, as well as which types of wills that are offered.

Why Do I need a will? If you don’t have one, a court decides who gets your assets, read more about what happens if you don't have a will.

 

Personal Financial Tips

  1. Pay your bills on time.
  2. Eat more at home and less out.
  3. Take your food to work.
  4. Forgo the ice cream store and pop popcorn at home.

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