Imagine if you not only lost a friend, but you lost access to an account with $190 million in it.
We didn't make that up. That's a news item this week (at the time of this writing). A Canadian Bit-coin investor suddenly died without a will, and without letting anyone know his investment account password.
This wasn't just his bit-coin fortune, it was a pool from a group of investors who now have no way to access their millions. What a nightmare, right?
While your loved one probably doesn't have 190 million dollars locked away, dying without a will causes problems. And not just the kind where you lose someone you love very much.
Learn why you should create a will, right now, in the article below.
What Does a Will Establish?
A will is a legally binding document that directs your wishes from beyond the grave. Or for some people, beyond their health, if they're deemed unable to handle their estate.
In your will, you'll map out what happens to your assets when you die. That means anything from your clothing and jewelry to your home and your stocks.
Most people leave these valuable things to assorted family members. They try to balance their bequeathments evenly so that their children don't feel slighted.
But not everyone leaves things to their children. Whether it's because they're estranged or their children don't want them, you can leave assets to groups as well.
For example, someone's will could direct their next-of-kin to cash out all their stocks and donate the proceeds to a charitable organization.
The Kinds of Wills
There are different kinds of wills. The most recognized one is the self-proving or testamentary will. This is a legally recognized document that was signed with witnesses and is usually notarized. It's the strongest form of will if anything needs to be argued in court.
Then there's the holographic will. It's better than dying without a will, but it's not very strong for court purposes. This is a will without any witness signatures.
The second type of weak will we have is the oral will or spoken agreement. These are almost impossible to prove since it's "my word against yours".
When you go through the process of creating a will, make sure it's witnessed and follows the instructions in your state.
Finally, we have a living will. A living will doesn't distribute assets and it's usually written at the same time as an official will.
In a living will, people write directives of what they want for themselves if they're incapacitated. Like if they go into a coma or can no longer provide care for themselves.
This is where you find documents like "do not resuscitate" and directions on what to do in the case of death.
It's not as big of a deal to die without a living will as it to die without a legal testament.
They Died Without a Will: What Happens Next
So, the worst has happened and you've lost a loved one. They didn't have a will, so what happens next? Depending on the family, it's not usually pretty.
1. People Will Fight
Grief is a terrible mental state to be in. People say and do things they'd never stand by were they not in that mental place. And, as such, relatives can get nasty about the division of assets.
Too many people have, and will, estrange themselves from loved ones over something as small as a wedding ring. Or a boat, or a house.
2. The Fights Will Get Expensive
Without a will, you can expect your heirs (relatives) to incur legal charges. Granted that they don't organize and arrange things themselves (unlikely) they'll need to hire a lawyer to do it for them.
That will cost them money in retainers and billable hours, which they may have to sell the asset they're fighting to cover. The lawyers themselves have to do complex mathematical equations to divide the assets evenly.
3. Your Funeral is About Them, Not You
As part of your will and living will, you're supposed to write out directives for the time of your death. Including what kind of burial service you want.
If there isn't such document, you may find yourself buried for all eternity when you wanted to be cremated.
4. Your Memory May Get Tainted
Back to those fights and disagreements, we talked about. When people are calling each other liars and fighting over your possessions, they lose the sense of "you".
Instead of mourning you and remembering the person you were, they concentrate on the disagreements. This is no way to leave your loved ones on earth - fighting and depressed.
Avoid All That: How to Establish a Will
Making your will is easy, and it could only cost the fee of a local notary. You can find templates for the document online and if your assets aren't complex, you can do it yourself.
If you have a lot of assets, you may want to sit down with your family lawyer or accountant to get a better understanding.
Creating your will with a lawyer is the best way to do it - they know about state laws and requirements. Plus, they usually have a notary on staff who will help you make the document official for no (extra) charge.
Want to get started so you can protect your family and not be someone that died without a will? Want to preserve your legacy once you're gone?
Look for a lawyer who works with estate planning software, which you can learn about here.