Tuesday, August 14, 2012

Legal Considerations for Retirement Part 2: The Last Will

As more Americans enter retirement, many are navigating the tricky financial and legal paths ahead. When it comes to planning your retirement, a last will is exceedingly important. In this, part 2 of a 7 part blog series, we will discuss why you need a last will.1

Why do I need a last will?
As discussed in the previous blog post (link to part 1), a last will is the document you use to allocate your resources to your beneficiaries after you have passed on. A last will helps you decide who will receive which assets and how much they will receive. If you do not have a last will, then the state will distribute your assets2 to your relatives after your death.

The state must follow certain rules and they cannot take your heirs’ wants or needs into consideration when distributing your assets. This makes a will a particularly important consideration for parents of young children. A last will allows the parent(s) to determine who has the legal right to care for their children in case they are no longer able to. Additionally, last wills are very useful if you have a trust as they allow you to put terms on the allotment of your assets. 

When creating a last will, you are able to decide who handles the division of your estate.  Without a last will, you cannot decide how much each person receives from your estate; the state laws do. A will gives you more power to decide how your assets will be divided.

The most important thing to remember is that a last will is not set in stone while you are still alive.  You may choose to amend your last will at any time.  In fact, at Kemp & Associates, we encourage you to periodically amend your will in order to adjust it for various changes. For instance, you may want to change your will if your family adds a member or if you get a new job.

When you have a last will, you will be a lot more confident that your assets are going to the right people. In the next part of this blog series, we will discuss revocable living trusts.

2 “Dying without a will: Who gets what?” Daily Herald, March 9, 2010; http://www.heraldextra.com/lifestyles/article_bce997c3-1748-5c1f-8463-3317e69bc2b6.html

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