Every Young Parent Needs A Will
It’s well documented that only about one-third of Americans have wills. As alarming as this is, what worries me more is that even fewer parents of young children have them: 14 percent of those aged 25-34 and 25 percent of those 34-45 have executed wills.
Why do the same folks who sacrifice so much for their families leave this important part of parenting undone? Answers range from “I don’t want to think about it” to “My family will take care of things” to “it’s too expensive.”
The purpose of writing a will is to make important decisions now, and memorialize those intentions, for a time in the future when you aren’t able to make them. If you die without a will, state law determines who will get your assets, who will raise your children if no parents survive, and who will handle the administrative details of your estate.
One big issue is who will take care of minor children if both parents die in an accident. Your will names the person you want to be your children’s guardian until they turn 18. A judge will decide this for you (obviously without your input) if you die intestate. This can pit grandparents against grandparents or sister of the mom against brother of the dad. Someone that you may not want to raise your children could petition successfully in court to become guardian. It is very normal for couples to put off making a will because they cannot agree on this issue.
Remember that it is better to reach an unsteady agreement than to do nothing.
Without a will to determine where your assets will go after death, the State of Tennessee will decide for you. For example, let’s say you die without a will and you’re survived by a spouse and two children. The State says that each child will inherit one-third of your assets and your spouse will receive the other third. There are many problems associated with leaving children two-thirds of an estate. It is rare to find an 18-year old mature enough to handle an inheritance of any size. I find that most young couples prefer to leave everything to their spouse, who will then take care of the kids.
Your will can set up a trust for your children until they reach a certain age, say 30 or 35. This prevents an 18-year old from getting access to a big pile of cash. Until then, the trustee (who may or may not also be the guardian) manages distribution of the money for the kids’ needs.
Now that you see the need for a will how do you get started? I prefer hiring an attorney to the on-line document preparation services. Simple wills are not very expensive. Google the Knoxville Bar Association. Check with a CPA or a friend.
Think of your will as a love letter to your family. And remember that it’s not for you. It’s for them.
This column was featured in the November 6 Knoxville News-Sentinel. You can read it here: Every Young Parent Needs A Will
Meet the Author
Tom Coulter, CPA
Tom is the President and a founder of Meridian Trust. Tom graduated from The University of Tennessee, Knoxville, in accounting with honors, in 1978. Tom previously worked for the international accounting firm, Deloitte. He later joined the financial medical advising firm, FIS Associates, before founding Meridian Trust in 1997. Tom has worked extensively in retirement planning, taxation, estate and financial planning and investment management. He is a Certified Public Accountant, a member of the American Institute of CPAs (AICPA), and the Tennessee Society of CPAs (TSCPA).
Tom is also credentialed as a Personal Financial Specialist (PFS) by the AICPA.