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Nov 2009
01
November 01, 2009

When Are You Old Enough to Need a Will?

The answer may not be as straightforward as you think. Susie Meyers, chair of the Trusts & Estates Practice Group at Warner Norcross, notes that there's no hard-and-fast rule about when you need a will, but there are some important things for young people 20-40 to realize about the planning process, including:

  • Don't have a will? Most states will write one for you. Susie says it's a misconception that if you die without a will in place that the state will take your money. Actually, most states (including Michigan) have a mechanism in place where they essentially write a will for you, prioritizing which of your family members will receive your assets. The problem, she notes, is that you might not like the will that the state writes for you.

  • Disability documents are more of a priority. Susie feels that disability documents -- or medical and financial powers of attorney -- are more important for people in the 20s and 30s to have in place. The chance of becoming disabled is probably higher than dying at this age, and these documents ensure you have control over who makes medical care decisions and who handles your finances when you are not able. Susie explains that if you don't have these in place, a probate court will get involved to appoint someone to make these decisions -- and while it might be a family member you would have chosen, you can avoid the court intervention if you think ahead.

  • Some beneficiaries may already be designated. These days, a will governs only the assets in your name -- so when you are signing up for a 401(k) at work or an IRA or even a checking account, you can designate the same or different beneficiaries. Susie says it's important to look at all the pieces and in context when making a decision.

So what's the tipping point when you a young person really needs a will? Susie said that when you have children, you need to put a will in place to designate guardians who would raise your children in your absence. Additionally, when you accumulate about $10K in assets, it's a good idea to have a will in place.

For more information about the service offered by the Trust & Estate Planning group at Warner Norcross, visit here.

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