Tax Tip #183

The main purpose of a will is to disburse property to heirs after one’s death. If there is no will, disbursements will be made according to state law, which might not be what the deceased would have wanted. 

There are two other equally important aspects of a will:

1. Naming the executor to manage and settle your estate. If you do not name someone, the court appoints an administrator, who might not be who you would choose.
2. Naming a legal guardian for minor children or dependents with special needs. If you don't appoint a guardian, the state appoints one for you. 

The current estate tax threshold is approximately $13 million for an individual. This does NOT imply that people with assets less than this threshold do not need a will.

Because a will is a legal document, the courts are reluctant to overturn any provisions within it. Therefore, it's crucial that your will be well-written and properly executed under your state's laws. It's also important to keep your will up to date. A will provides peace of mind for your most precious assets — your children — for a relatively low cost. The goal of this tip is for those who do not have a will to add this task to your never-ending “to do” list.