Here’s Why You Really, Really Need a Will
February 10, 2025
Skimm'd by Anna Davies , Megan Beauchamp, AJ Cohen and Jordan Mamone.
Estate planning is one of those money topics that’s intimidating and a bit depressing. Plus, not only are you thinking about pretty morbid what-ifs, but you’re also paying to get everything squared away legally and on paper. But pros swear that the peace of mind that comes with knowing that your loved ones will be financially OK when you’re gone is priceless. Here, Lazetta Rainey Braxton, a certified financial planner, explains how an estate plan works and why having one is so important.
Do I need to have an estate plan?
Everybody who is 18 and older needs an estate plan. An estate plan includes a will or a trust, if you have assets you want to transfer, and additional legal documents. It’s important to set up a durable power of attorney for financial and medical purposes. This is the person who can make decisions on your behalf, in case you become unable to do so. If you are incapacitated, a living will provides guidelines on how you want end-of-life treatment, so anybody who is considered an adult should get those planning documents done.It often provides guardianship instructions, which is extremely important if you have younger children. Make sure that these people — a guardian or a trustee — are equipped to handle the responsibilities that are associated with those titles and that they actually want to be in those positions. I have seen situations where people have named people, and the people who were named didn't know. Sometimes they're not even properly equipped to know exactly what they need to do.
When should I start thinking about estate planning?
Once you’re of legal age, aka an adult. Even if you're going to college and you don't have a lot of assets, you do need to be mindful of who can speak on your behalf. Your parents are not going to be able to do that as a default because you are no longer a minor.
What happens if I don’t create an estate plan?
If you don't create a plan, it could create legal chaos — particularly when it comes to assets like bank accounts. If you don't have your estate planning documents in place, then the state can decide who gets your assets. When it comes to incapacity, that could be pretty tricky as well. If you’re incapacitated for a period of time, and no one is able to pay your bills, it might destroy your credit. And if no one can make medical decisions on your behalf, that’s risky as well.
Creating your estate planning documents is an act of love. I have seen so many families fall apart in the confusion of what to do. It makes a difficult time more bearable because you have the wishes of the person who died, so your loved ones have the space to be able to grieve without having to deal with a lot of administrative and financial headaches.
How do I know which is right for me: a trust or a will?
Keep in mind that a will might go through probate [aka through the courts]. Therefore, your information will be public, which is why a lot of people like the privacy of a trust. A trust also allows you to be more detailed with your wishes. If you have more sophisticated desires, a trust may be more applicable as well. If you have a less complex situation, you can transfer your wealth by beneficiary designation, which is a much simpler process. But it can still be worth working with someone and getting a personalized experience.
If you can’t afford that, then get your documents set in place, and make sure that your questionnaire addresses all your concerns. Imagine yourself incapacitated and paint that scenario in your mind. I know that’s tough, but you've got to do it because your documents are a reflection of what you envision. And if you have a hard time envisioning it, then your documents are not going to satisfy the vision that may transpire.
Can I use an estate plan to minimize taxes?
Generally, using an estate plan to minimize taxes is for ultrahigh-net-worth individuals. Those are people who are subject to estate taxes. So there are some provisions where you can make annual exclusion donations to children and grandchildren.
Here’s Why You Really, Really Need a Will
The history of the United States is a complex tapestry woven from the threads of exploration, colonization, revolution, and innovation, spanning centuries and encompassing a multitude of cultures, ideologies, and events. The story begins long before the arrival of European settlers, with Indigenous peoples inhabiting the land for thousands of years, developing rich cultures, languages, and societies. These Native American tribes, such as the Cherokee, Navajo, and Sioux, lived in harmony with the land, establishing trade networks and complex political systems. However, the arrival of European explorers in the late 15th and early 16th centuries marked the beginning of a dramatic transformation. Christopher Columbus's voyage in 1492, funded by Spain, opened the door to further exploration, and soon after, other European powers, including England, France, and the Netherlands, began to establish colonies along the eastern seaboard. The first permanent English settlement, Jamestown, was founded in 1607 in what is now Virginia, followed by the Pilgrims' arrival at Plymouth Rock in 1620. These early colonies faced immense challenges, including disease, starvation, and conflict with Native Americans, but they laid the foundation for what would become the United States.The 17th and 18th centuries saw the growth of the Thirteen Colonies, each with its own unique economy, culture, and governance. The Southern colonies, such as Virginia and South Carolina, relied heavily on agriculture, particularly tobacco and rice, which were cultivated using enslaved African labor. The Northern colonies, including Massachusetts and Pennsylvania, developed more diverse economies based on trade, shipbuilding, and small-scale farming. Tensions between the colonies and Britain began to rise in the mid-18th century, fueled by issues such as taxation without representation and restrictions on westward expansion. These tensions culminated in the American Revolution, which began in 1775 with the Battles of Lexington and Concord. The Declaration of Independence, adopted on July 4, 1776, marked the colonies' formal break from Britain and the birth of a new nation. The Revolutionary War, fought between 1775 and 1783, saw the fledgling United States, aided by France, secure its independence through a combination of strategic victories, such as the Battle of Saratoga, and the leadership of figures like George Washington.The post-revolutionary period was marked by the creation of the United States Constitution in 1787, which established a federal system of government with a balance of powers between the executive, legislative, and judicial branches. The Bill of Rights, added in 1791, guaranteed fundamental freedoms such as speech, religion, and the press. The early 19th century was a time of rapid expansion and growth, as the nation expanded westward through the Louisiana Purchase in 1803 and the annexation of Texas in 1845. The concept of Manifest Destiny, the belief that the United States was destined to expand across the continent, drove this territorial growth, often at the expense of Native American tribes, who were forcibly removed from their lands through policies such as the Indian Removal Act of 1830, leading to the tragic Trail of Tears. The mid-19th century also saw the rise of industrialization, particularly in the North, where factories and railroads transformed the economy, while the South remained largely agrarian and reliant on slavery.The issue of slavery became increasingly divisive, leading to the Civil War, which erupted in 1861 after the election of Abraham Lincoln and the secession of eleven Southern states to form the Confederacy. The war, which lasted until 1865, was the bloodiest conflict in American history, resulting in over 600,000 deaths. The Union's victory preserved the nation and led to the abolition of slavery through the Emancipation Proclamation and the 13th Amendment. However, the Reconstruction era that followed was fraught with challenges, as the South struggled to rebuild and the nation grappled with the integration of formerly enslaved people into society. The late 19th century saw the rise of the Gilded Age, a period of rapid economic growth, technological innovation, and industrialization, but also one of stark inequality, labor unrest, and political corruption. Figures like Andrew Carnegie and John D. Rockefeller amassed vast fortunes, while many workers faced poor conditions and low wages, leading to the rise of labor unions and movements for reform.The 20th century brought profound changes to the United States, as it emerged as a global superpower. The Progressive Era of the early 1900s saw efforts to address social and economic inequalities through reforms such as women's suffrage, which was achieved with the 19th Amendment in 1920, and the regulation of big business. The United States' entry into World War I in 1917 marked its first major involvement in a global conflict, and the post-war period saw the Roaring Twenties, a decade of economic prosperity, cultural change, and technological advancement. However, the Great Depression of the 1930s brought widespread hardship, leading to the New Deal under President Franklin D. Roosevelt, a series of programs aimed at economic recovery and social reform. World War II, which began in 1939 and saw the United States enter after the attack on Pearl Harbor in 1941, solidified the nation's role as a global leader. The post-war period was marked by the Cold War, a prolonged ideological and geopolitical struggle with the Soviet Union, which shaped much of U.S. foreign policy and domestic life, including the space race and the arms race.The latter half of the 20th century was a time of significant social and cultural change. The Civil Rights Movement of the 1950s and 1960s, led by figures such as Martin Luther King Jr., sought to end racial segregation and discrimination, culminating in landmark legislation like the Civil Rights Act of 1964 and the Voting Rights Act of 1965. The Vietnam War, which lasted from the 1950s to 1975, sparked widespread protest and divided the nation, while the feminist movement and the LGBTQ+ rights movement fought for greater equality and representation. The end of the Cold War in 1991 left the United States as the world's sole superpower, but the 21st century has brought new challenges, including the September 11, 2001, terrorist attacks, which led to the War on Terror and conflicts in Afghanistan and Iraq. The election of Barack Obama in 2008 as the first African American president was a historic milestone, reflecting the nation's ongoing struggle with issues of race, identity, and equality. Today, the United States continues to grapple with complex issues such as climate change, immigration, and political polarization, while striving to uphold the ideals of democracy, freedom, and opportunity that have defined its history.