What is a Simple Will?
Wills are often the only estate planning document that people will make during their life, but many people hesitate when it comes to creating a will because it seems like too daunting of a process. It doesn't have to be, however. Simple wills can accomplish most, if not all, of what a more complicated will can, and will require much less time and effort to create.
Simple wills can take care of distributing property after your death, naming a guardian for your children, putting someone in charge of managing your children's financial affairs, and choosing someone to act as the executor of your estate. Self-help books, software and online forms can all help to create simple wills.
Are Simple Wills for You?
If you're under the age of 50 and have a relatively small estate (not subject to estate taxes), then a simple will can probably handle everything you need to do. If you have a larger amount of assets or you want to do more complicated things with your estate after your death, then simple wills might not be the right choice.
Here's an example of a common situation where a simple will is appropriate:
Don and Betty are both in their mid-30s and have two young children. They've just finished paying off their student debts, so they haven't accumulated many assets yet. They can use simple wills to pass their wealth to each other if one of them passes away, or to give everything to their children in equal shares if both of them pass away at the same time. In the same documents, they can also name someone to care for their children until they reach adulthood.
Simple Wills Don't Have to Go Through Probate, Right?
Sorry, but even simple wills will usually have to go through some form of probate proceedings, so it's important to name an executor in your will who can guide your estate through the probate process.
This shouldn't be too big of a concern at this point, however: most simple wills are made just to cover the unlikely situation that a person passes away unexpectedly. Once you've lived into your middle ages and accumulated more wealth, you can start to think about ways to avoid probate.
When You Shouldn't Use Simple Wills
If you're under the age of 50, healthy and your assets wouldn't be subject to estate taxes if you passed away right now then a simple will can work for you. Here are some situations where you shouldn't use a simple will, however:
- You want to manage your money after you die. For example, you would like to establish a trust that provides income for your children and then transfers the property to your grandchildren after the death of your children.
- Your estate is subject to estate taxes upon your death or the death of your spouse.
- You need to set up a special needs trust for your disabled child.