Of the trendy terms to come around in the past decade, "bucket list" remains among the most useful, but there's one important item people forget to add.
Of the trendy terms to come around in the past decade, “bucket list” remains among the most useful, says retirement planning expert Jeff Gorton, CPA, CFP.
“As a neologism, I hope it endures because it reminds us of how precious our time is — and that it’s important to plan wisely,” says Gorton, head of Gorton Financial Group. “Unfortunately, after some have listed their items and even checked a few things off, they forget about one important item that really counts after they’ve ‘kicked the bucket’ — their will.”
Only about 40% of adults in America have a will, which is probably due to people not wanting to be reminded of their own mortality and that life will go on without them, he says.
“But what’s the alternative? If you die without one, the state decides what becomes of your property, without regard to your priorities,” says Gorton, who also advocates his clients make use of a written income plan, a living document that helps organize financial priorities. “Why not enjoy the fact that a will is an instrument of power? You get to decide who gets what.”
Since so many adults don’t have a will, many don’t understand how they work. Gorton breaks down wills into four basic parts:
Most wills begin by naming an executor, the person responsible for carrying out the wishes outlined in the will. Duties include assessing the value of the estate, gathering the assets, paying inheritance tax and other debts if necessary, and distributing assets among beneficiaries. It is recommended that you name at least two executors in case your first choice is unable to fulfill the obligation.
A will allows you to designate a guardian for your minor children. Whomever you appoint, you will want to make sure beforehand that the individual is able and willing to assume the responsibility. For many people, this is the most important part of a will since, if you die without naming a guardian, the court will decide who takes care of your children.
This section enables you to identify people or organizations to whom you wish to give gifts of money or specific possessions, such as family heirlooms or a car. You can also specify conditional gifts, such as a sum of money to a young daughter, but only when she reaches a certain age.
Your estate encompasses everything you own, including real property, financial investments, cash and personal possessions. Once you have identified specific gifts you would like to distribute, you can apportion the rest of your estate in equal shares among your heirs, or you can split it into percentages. For example, you may decide to give 45% each to two children and the remaining 10% to a sibling.
“You’re not legally required to have a professional write a will for you, but I highly recommend you get certified help because these documents are often contested by people who are unhappy with the decisions you made,” he says. “After working a lifetime for your assets, you deserve to have them go where you want after you’re gone, and your family will be grateful to you for not leaving them with the headache of trying to sort out your estate.”