Will Creation Minimum Net Worth?
Most people know they need to have a will at some point, but when?
Is there a certain amount of money you should have to your name (net worth) before you have a will made?
Is it a waste of money to have a will made if you don’t own many valuable things?
If You Have Anything of Value You Should Have a Will
Okay, I must admit, that’s not completely true. What the headline should say is “if you have anything of value and you want to give it to someone that isn’t a family member or first in line with the state’s model of distribution then you should have a will.”
I thought was a little long winded.
The next question, though, is, “what does that even mean?”
Without a Will You Have No Control
If you die without a will your stuff is distributed according to the state’s rules. What that means is this:
First, if you are married all of your community property (property that is deemed to be held within the relationship) goes to your spouse.
Second, if you have separate property (property that was given to you specifically, you inherited or you brought to the relationship), some of that property is going to your spouse:
- If you have kids, half of this property goes to your spouse;
- If you don’t have kids but your parents are alive or your aunts or uncles are alive, your wife gets 3/4 of your property; or
- If you have no kids and no surviving parents or aunts and uncles, your spouse gets it all.
What this really means is if you have a girlfriend or boyfriend, close family friends, or close friends or other relatives that you would like to leave something to, if you don’t have a will that’s not going to happen.
Without a Will You Can’t Name a Guardian for Your Kids
Could you imagine leaving up the decision for raising your kids to a judge that has no idea who you are?
If you have no will, that’s exactly what’s going to happen.
Without a Will You Can’t Choose Who Manages Your Estate
Just like with your kids, if you die without a will a judge will choose someone to handle your estate.
While that might not sound like a bad idea, there are a couple of things that aren’t so great about it.
First, this person will have complete control over the distribution of your stuff. What that means is there is a great chance they will simply sell all of your possessions and distribute the cash (they have no direction on where you’d want your stuff to go).
Second, this person will take a hefty chunk of your stuff and put it in their own pocket. No, not because they will steal it. Executors get paid for their work. Their payment comes out of your pocket.
Without a Will You Can’t Control Tragedy
You may be thinking to yourself “no problem. I like the rules. I’m just going to leave everything to my wife anyway. No need for a will.”
That’s just fine and dandy, but there’s one circumstance you are forgetting about: what if you both die at the same time?
If that happens then your stuff can’t go to your wife. So again, it will be passed down according to the state’s decided rules and some of your money will be pocketed by a person you gave no direction to who is responsible for distributing everything you’ve worked your whole life to accumulate.
Going back to the original question, is there a minimum net worth you should have before getting a will? No.
Do the right thing. Put together a will. You’ll be glad you did.
P.S. Do you have kids? Have you completed guardianship paperwork? Have you done it correctly? Click here to find out what happens if you don’t do anything: Are you okay with a judge choosing the guardians of your children?
P.P.S. Do you own a business? Do you have a plan so the business, and your family, can survive if something happens to you? If not, click here to learn how simple it is to protect your business and your family from tragedy: 5 Ways to Protect Your Business from Catastrophic Failure.
P.P.S. Do you have no kids and think you don’t need an estate plan? Single and think a will is only for married couples. You couldn’t be more wrong. Click here to learn more: 5 reasons estate planning is a must have even if you don’t have kids.
Christopher Small is a Kirkland estate planning attorney who helps people get rich and live forever. He is also the owner of CMS Law Firm LLC.