The real reasons you need a will

Why don’t most adults have a will? The no. 1 explanation they give is “I just haven’t gotten around to it.” I blame the lawyers for not making it easy. But the no. 2 reason is “I don’t have enough assets to leave to anyone.” And you know what? I blame the lawyers for that, too. (Detect a theme?)

If that’s the second biggest reason people don’t have a will, lawyers are dropping the ball. We’re the ones who know it’s a misconception that estate planning is only about who gets your assets. That’s just one part—and often not the most important.

Let’s start, though, with that misconception. If you think to yourself, I don’t really have anything, then why pay some lawyer for a will?

For starters, you might have more than you think to pass on. Have you considered your life insurance? (Don’t forget about employer-provided group plans.) Have you considered your house and your cars? Even if you have a mortgage or other debt, and even if you think what you have isn’t valuable compared to other people, these assets probably add up to something significant for your beneficiaries. Enough to do some real good; enough to squabble over.

Speaking of debt, you might be assuming it will wipe out anything you have left at your death. That might be true of some types of debt—in general, all debts, taxes, and final expenses are paid before any beneficiaries—but there are exceptions. A big one is federal student loans, which are discharged entirely at death. That means that even if you have a big outstanding balance on student loans, it’s possible you’ll have something to pass on. Other types of debt might be settled for smaller amounts or excluded entirely as part of the probate process. Don’t assume debt will prevent you from leaving property to your family.

But in any case, a will does more than just distribute property. Probably the most important thing a will does is put someone in charge of your final affairs. Somebody will have to pay your debts, file your final taxes, and actually distribute the property. This is an important job, not just because it involves handling money and legal matters but also because these things can have a big impact on your family. Dealing with final affairs can easily lead to conflict, no matter how much property you have. So it’s important to have someone in charge who is trustworthy and wise enough to navigate relationships and conflicts. You name that person in your will. If you don’t, you’ll end up with no say in who ultimately does this important job. And somebody will do it, one way or another.

Another important part of a will, if you have a young family, is naming guardians for your minor children. These are the people you want to raise your children if the worst were to happen. At the same time, you’ll need to decide who will be in charge of your children’s inheritances until they reach a responsible age. These decisions are some of the hardest in any kind of estate planning—and the most important.

You’ll need to make similar decisions for a child of any age who is severely disabled, or for a child who has a severe illness, addiction, or debt. These situations are a huge opportunity to do good, as well as a big risk of they aren’t planned for.

But this is all just about the will and what it can do besides divvy up your assets. What most people don’t realize is there’s more to good, simple estate planning than just drafting a will. Often more important are the documents that give your family the tools they might need to take care of you while you are still alive. These are called powers of attorney.

In Wisconsin there is a power of attorney for finances and a power of attorney for health care. These documents delegate your legal rights to make your own decisions and manage everything about your life to other people. Why would you do that? In case you come to a time when you can’t make your own decisions or manage your own finances and health care.

In those times, somebody else must take on those responsibilities (and, by the way, your spouse doesn’t automatically get them). If you haven’t chosen that person by executing powers of attorney, your family will have to go to court and get a judge to choose—an expensive and lawyer-heavy process called guardianship. Better to choose your own trusted agent and save your family the pain and expense of trudging through court just to take care of you.

For most people, estate planning is as much or more about letting their families care for them as it is about leaving money for their families. We’ve all seen friends and family surprised by tragedy, grief, and hard times. In those situations, your family just wants to know your wishes and have the ability to carry them out. Without a good estate plan—a will and powers of attorney, at least—they might have neither.

Fortunately, a good estate plan doesn’t have to be complicated or expensive. It can be simple.