Estate Planning: Wills

A will is a legal document that directs the distribution of your probate assets after death. Surprisingly, only about 25% of Americans have one.¹

If you die without a will ("intestate"), the state manages your estate and distributes your assets according to state rules. Having a will ensures that your wishes are carried out smoothly, efficiently, and cost-effectively, with your assets transferred to your intended beneficiaries.

You should draft a will as soon as you have assets. Once you have a will, it's important to update your will if you move to a new state, if federal or state estate rules change, if you have children (to name them and designate guardians), if you change your mind about beneficiaries, or if beneficiaries pre-decease you.

Some common misunderstandings about wills include:

• Beneficiaries on accounts replace a will: This is incorrect if you have other assets (car, house, possessions) outside of your investment accounts.
• A will overrides beneficiary designations: This is incorrect. Account beneficiary designations transfer assets outside of the estate to the listed beneficiaries.²
• Marriage means you don't need a will: This is incorrect. State laws vary on asset distribution to spouses and children. Certain states distribute directly to the spouse, while others may split assets between the spouse and children.³A trust replaces a will: This is incorrect unless all assets are titled to the trust before death. A "pour-over will" covers assets not in the trust at the time of death.

Creating a will is often postponed, but dying intestate creates unnecessary complexity for your loved ones and risks having your assets distributed in a manner inconsistent with your wishes.

As your financial advisor, I can help you establish an estate plan including connecting you with an estate attorney to draft the necessary legal documents. If you have questions about how your investments and assets fit into your estate plan, please contact me at peter@onedayinjuly.com.

1. 2025 Wills and Estate Planning Study (Caring)
2. While the assets will transfer outside of the estate (probate) process, they are still taxable assets for the estate.
3. Vermont and Pennsylvania are two examples of states that have different succession rules for intestacy.

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