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Why Do You Need A Will?
A will is a legal document that contains your instructions regarding the distribution of your property when you die.
If your net worth exceeds certain thresholds, a will can include sophisticated provisions that may reduce or eliminate the amount of estate tax that will be payable when you die. (Currently, the combined federal and NJ estate tax rates are approximately 50%.)
However, even if your estate would not be subject to estate tax, there are many important questions that you can answer in a will. For example:
a. If you have minor children, who will take care of them if you die?
Will that person also have control of any property inherited by your minor children? (If you die without a will, the court will appoint the guardian and may appoint someone you don’t know to be the trustee for your child’s money.)
b. Who will inherit your property when you die?
If you do not have a will, the answer to this question can vary widely depending upon your family situation at the time of death. What state do you live in? Are you married? Is it your first marriage? Do you have children with your current spouse or from a prior marriage? Does your spouse have children from a prior marriage? Are your parents still alive? Do you have a domestic partner? These are just some of the questions that can affect how your estate would be distributed if you do not have a will. Also, without a will, you cannot leave specific property, such as a wedding ring or other items of sentimental value, to a specific person.
c. If any of your property is inherited by a minor child:
Who will have control of the money until your child becomes an adult? At what age will the property be turned over to your child outright?
d. Who will be in charge of gathering your property and making sure that it is distributed to the right people?
If you do not have a will, the answers to questions such as these will be determined by courts based on state law. Besides the added complexity of appointing an administrator, the courts will require the administrator to post a bond, which can be expensive.
By making a will, you decide how these and other important questions will be answered. Furthermore, by making your intentions known in a properly prepared will, you can provide for a smooth transfer of your assets, which will save your loved ones time, stress and expense.