Drafting a will is perhaps one of the most critical stages in your financial planning cycle. Why? You have carefully worked on wealth creation throughout your life, so it is critical to take care of it when you are not around. A carefully written will help you distribute your wealth and other assets equitably and as per your wishes.
Why is Your Will a Critical Part of Your Financial Wellbeing?
It’s a widely acknowledged fact that a will secures the future of your loved ones, and gives you peace of mind. But, you can distribute your wealth verbally or by writing about it on a piece of paper as well. Then, why do you need a will? Here is why:
It is a Legally Binding Document
A will is a constitutionally prescribed legal document that notifies the court and the family members of how any late individual wishes to distribute their wealth. Today, drafting a will is a prerequisite for legally transferring an individual’s assets and wealth to their inheritors.
Here is a point to note. Since your will is an official document, you require the signature of two witnesses along with yours on it.
Without a Will, Your Family Members May End Up Going to Court
While it may sound unpleasant, it’s not uncommon for family members to move the court over property or wealth dispute of a passed family member. However, a will ensures that the distribution is carried out without requiring the intervention of a court and in a harmonious manner.
Remember, your will is the singular document responsible for conveying your wishes regarding legal succession and transfer of assets upon death.
Allows You to Reveal All Your Assets
You often don’t end up sharing the details of all your deposits, accounts and assets with your spouse or children. Besides, even if you did, it may be hard to keep track of every financial bit here and there. A will brings on paper all the wealth created by you during your lifetime. This streamlines the process of equitable distribution.
The chances of certain smaller assets going unnoticed are eliminated, and everything falls into the hands of their rightful owners.
Let’s You Continue Donating to Social Causes
Perhaps you want your contribution to specific social causes or charities to continue after your death. But, your inheritors might not always agree with such a notion. However, you can pre-assign a certain share of your wealth for your causes in your will.
Once you put the wealth share down on this legal document, your inheritors won’t have the agency to stop your donations to your charities. If they do, the court can issue a legal order asking them to release the funds necessary for donation.
Additional Read: Does your financial plan account for lifestyle inflation?
The Bottom Line
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