What is a will and why do you need one?

A last will and testament, often called a will, generally takes effect after death. State law affects who can create one, how it must be signed and how it is used after death. Because the rules differ, consider checking the requirements where you live or speaking with an attorney licensed in your state.

What does a will do?

A will generally applies to certain property that becomes part of your probate estate after death. Examples may include a home or other real estate, vehicles, personal belongings and certain bank or investment accounts, depending on how they are owned. State law and the terms of the document also affect what a will can do.

The executor’s role may include finding estate property, paying valid debts and distributing remaining property according to the will and state law. A person named as executor may need court authorization before handling certain estate matters.

Why is a will important?

One benefit of having a will is that it records choices that state default rules may not make for you. It can identify who should receive certain property and whom you would like to help manage your estate.

You may want to consider a will if you want to leave property to an unmarried partner, friend, stepchild or charity that might not inherit under state default rules. Parents may also use a will to express whom they would prefer as guardian for minor children.

A will does not guarantee that each instruction can be carried out exactly as written. Spousal rights, creditor claims, taxes, property ownership and other legal rules may affect the result.

What happens if you die without a will?

If you die without a valid will, state law generally determines who receives probate property that does not transfer another way. A probate court may oversee the process. This is called dying intestate.

Who inherits and how much they receive depend on state law and family relationships. A court may also appoint someone to manage the estate.

State default rules may not match the choices you would have made. For example, they may not provide for an unmarried partner, friend, stepchild or charity.

Property with a valid beneficiary designation or survivorship right may still pass under that arrangement instead of the intestacy rules. Property held in a trust may pass under the trust’s terms.

Does a will avoid probate?

Generally, no. A will does not by itself avoid probate.

Probate is a court process used to decide whether a will is valid and handle certain estate matters after death. The process may include collecting estate property, paying debts and distributing remaining property. When probate is required, a court may authorize an executor or another personal representative to manage the estate.

Not all property necessarily goes through probate. Depending on state law and how an asset is set up, some property may pass outside probate because it has a beneficiary designation, is owned with survivorship rights or is held in a trust.

What does a will not control?

A will may not decide what happens to property that passes under a contract, beneficiary designation, ownership arrangement or another legal document.

Review your beneficiary designations and ownership arrangements along with your will. A valid beneficiary designation may control an asset even if the will says something different.

The IRS explains that retirement plan beneficiaries are designated under the procedures set by the plan. Account terms, policy terms, spousal rights and applicable laws may also affect who receives an asset.

When should you make a will?

The right time to consider a will depends on your family, property and goals. You may consider creating one when you own property, have dependents or want to choose who receives certain estate property.

Common times to create or review a will include:

• Family changes: you marry, divorce, remarry, have a child or adopt a child.
• Property changes: you buy a home, start a business, receive an inheritance or gain other major assets.
• Beneficiary changes: you want to add, remove or change a person or organization.
• Role changes: an executor, beneficiary or preferred guardian dies or can no longer serve.
• Location changes: you move to another state.
• Plan changes: your finances, goals or relationships change.

Major changes in your family, property or goals may also be reasons to update your estate plan. Because state requirements differ, consider legal help when you create or revise a will.

How to make a will

The requirements for creating a valid will differ by state. Consider these general steps:

1. Review your property: list major assets and note how each one is owned.
2. Check beneficiary designations: review life insurance, retirement accounts and payable-on-death or transfer-on-death accounts.
3. Choose beneficiaries: name who should receive property controlled by the will and consider backup choices.
4. Choose key roles: select an executor and if needed, state your preferred guardian for minor children.
5. Prepare and sign the will: follow your state’s rules for signatures, witnesses and other required steps.
6. Store and review it: keep the original in a secure place like a home safe where it can be found and revisit it after major changes.

Before writing a will without a lawyer, consider whether your family, property or instructions are complex enough to call for legal help. An attorney may be useful if you own a business, have property in more than one state or are planning for a person with a disability.

What is the difference between a will, living will and trust?

These documents serve different purposes:

A living will is a type of advance directive. It records certain health care preferences for times when you cannot make or communicate medical decisions. Despite the similar name, it serves a different purpose from a last will and testament.

A trust is a legal arrangement in which a trustee holds or manages property for one or more beneficiaries. Understanding how wills and trusts work together can help explain their different roles in an estate plan. Different types of wills and trusts serve different purposes. A last will generally takes effect after death, while a trust may operate during life, after death or both.

How does a will fit into an estate plan?

A will is one part of a broader estate plan. Beneficiary designations, property ownership, powers of attorney, advance directives and trusts may also affect how your property and decisions are handled.

An estate planning checklist can help you organize these items and identify documents or designations that may need review.

Because estate and probate laws vary by state, consider speaking with an attorney licensed where you live about your situation.