In our meetings with retirement plan participants, I always try to cover the four basics:
- How much to contribute?
- To which plan (Roth or Traditional)?
- How does it get invested?
- Do beneficiaries need to be updated?
After those, I say something like, “and this doesn’t have anything to do with your retirement plan, but do you have a will?” Based on my thumb-in-the-air, wild guess, I estimate that 70% say no. The most common reason for why they don’t is some version of, “I’ve been meaning to but haven’t gotten around to it.” To add a scientific air to my observation, I would say there is a correlation between the answer and wealth. That is to say, those with higher wealth/account balances tend to say yes and vice versa. There also seems to be a correlation between the answer and age; younger participants are less likely to say yes.
Why Do I Consistently Bring This Up?
You can do a Google search on “why should I have a will” to come up with a number of reasons you should think about getting a will. You might think that you need lots of money before you need a will, but one of the most important reason for getting a will—at least for us—is because the will is where you will specify a guardian for your children—and your pets if they’re important to you. If you don’t specify this in your will, the state in which you reside will decide for you. In Indiana, however, one can establish a guardian(s) by a standalone document, according to Tim Babcock, attorney at Dale Huffman & Babcock.
In Indiana, an adult child is first in line to be the guardian of your minor children, so an 18-year old child would be responsible for his/her siblings unless you arrange otherwise while you are still in this mortal coil.
The state also decides who will get your stuff. In Indiana, property not jointly held is split 50:50 between one’s spouse and children. Property doesn’t automatically transfer to one’s spouse as would seem reasonable.
While you might be able to find internet resources for a DIY will, we recommend seeing an attorney. It’ll cost more, but you get what you pay for. And, by the way, you don’t create a will for yourself; you do it for those you care about.
For a fascinating, if not a bit terrifying read on dying without a will, which is technically called dying intestate, check out the article, “The Mystery of the Millionaire Hermit.” For a good podcast on the subject, check out Do You Really Need an Estate Plan?
Want more advice on how to best prepare? Check out this post about another way I have chosen to provide for my family’s future.