Dave Ramsey, a seasoned personal finance expert with a diverse range of topics such as the baby steps, but what does he think of wills and trusts?
He expressed the opinion that it’s best to sort out your family’s welfare before your demise. And since no one knows their exact date of death, he’s of the opinion that you should get it sorted as early as possible. So if the reason why you don’t have a will is that you lack expertise in ways to go about it, then you should keep reading on knowledge about that.
In this article, we’ll elucidate on some controversial questions that Dave Ramsey’s answered on wills.
How to Make a Will?
1. Choose what to include in your will
It’s imperative to be specific about the constituents of your will, estate, and savings. Have extensive paperwork detailing your real estate and your home, alongside important insurance policies, retirement, and bank accounts.
Do you own a pet, art collection, or a car you’d like to donate to a specific individual? Write it in the will. This ensures that the executor knows how best to share your assets–this takes out the headache of ensuring everyone gets what’s deserving of each.
2. Specifically Detail Where all your Property should go.
Here, Dave Ramsey advises that you shouldn’t make estimates. Detail where you’ll like to have everything go and to whom? Is it your spouse, your extended family, your children, or a charity? Break down each asset to the barest unit obtainable, and allocate each unit to desired persons or organizations.
You may leave the property to your beneficiaries to use as they desire, or you may create requirements for obtaining and spending the will.
Also, in an instance where you own a home with an individual, and you desire to give them your own part of the property, then the asset automatically becomes the other person’s title. However, a will can’t overrule a property owner–except the property deed is changed.
3. Choose your beneficiaries
The next logical step to take is to jot down the names of beneficiaries–Dave described these beneficiaries as entities you’ll like to give your assets. Albeit Dave recommends that you leave all your properties to your spouse if they’re still living, otherwise, you’ll have to divide your assets to individuals you deem deserving of it.
You can give your kids an equal percentage of your property, or you may allot a set dollar to each of your kids. You’re also at liberty to leave whatever you deem fit to charity, and there could be special items you want to give certain individuals–one such example is a vintage train set that your kids love to play with. Irrespective of your decision, Dave recommends that now is the ideal time to record.
4. Select your Will Executors
A will executor is an entity that reads the content of your will and ensures that its instructions are executed. These individuals handle special giftings and ensure that any funds in your will are used to settle debts left before demise.
Dave Ramsey recommends that you choose a responsible, level-headed, and ethical individual that you trust. He also recommends that such an individual shouldn’t be intimidated by strong-willed relatives. Examples of ideal executives are an adult child, an attorney you know, or a family friend. Attorneys are often compensated for doing this out of the funds in your estate, and laws regarding attorney fees vary from state to state.
5. Name preferred guardians for your children
In an instance where you have kids that are minors, it’s imperative that you write down the names of their guardians in your will. These guardians are individuals that are willing and expected to cater to them when in your absence.
Ideally, a guardian should be an individual you trust. It’s best to first discuss this with a prospective guardian before making the decision.
You may set some money aside to assist the guardians with catering for your kind, and any other person you’d like to have them take care of.
Also, keep it in mind to grant your guardians authority and access to any savings or insurance accounts you’ve opened for your children (like an account for their 18th year birthday, or a college fund). By doing this, you’re ensuring that the funds you’re getting are being put to use.
6. Sign your will in the presence of witnesses
This is a super important aspect. A will, albeit written, is not a valid one till you’ve signed it, and dated it. It’s also legally mandatory to have two witnesses present at the signing of the will.
These witnesses must be individuals that won’t inherit anything from the will, in any instance where they are, they’ll be disqualified. It’s also imperative that these individuals know you very well, as they’ll be called to make an appearance before the court to confirm that they’re.
However, Dave Ramsey noted that your witness may avoid going to court by providing (a self-proving affidavit). This is a required stipulation in some states. The self-proving affidavit can best be described as a notarized document confirming that your witness saw you sign the document. It also confirms that your witness saw you sign the document without any duress.
This document is a testimony. And if your will becomes subject to litigations, then their presence will not be mandated.
7. Hint Everyone
It’s best to inform all parties of your will before time. For the guardians and executor, ensure you seek their permission before you bestow these responsibilities on them. They shouldn’t just be capable, but also willing to undertake these roles.
It’s best to get rid of every mystery in your will by hinting at beneficiaries of its constituent beforehand. Dave Ramsey noted that from experience, this saves them from some heartache later on. He elucidated that all and sundry get peace of mind from this decision.
Where Should You Store Your Will?
Dave Ramsey advised that you store your will in a legacy drawer. The legacy drawer is a fireproof and waterproof folder or box that holds your important documents for an eventuality. Dave says an ideal legacy drawer should contain the original document for your will (signed by you and your witnesses), details of your bank accounts, insurance policies, and estate plans. Other documents to include are:
- Tax returns;
- Funeral instructions;
- Passwords to online accounts;
- Other details you want your family to know.
Should you Type or Write your Will?
Dave says your will can either be typed or written. However, he prefers a written will as your handwritten one provides more legitimacy to all parties involved.
Also, if you have a highly disciplined executor, your words can make it easy to execute the will’s content.
Note: Ensure you’re honest to all and sundry about what they’re getting. In an instance where you plan to leave them a business, it’s best to first discuss with them about their willingness to manage the company. This should also hold for pets, money, and other important things that involve time and managerial skills.
How Often Should I Update My Will?
Dave Ramsey advises that you constantly revisit and update your will as your life changes. If you move to a different state, or when you’ve given birth to more kids. You should also update your will when your divorce, remarry, and when a relative dies. Even when nothing significant happens, it’s best to read through your will multiple times and consider whether to leave it the same or not.
According to Dave, here are 8 times to update your will:
- Getting married
- Having a child
- Kids growing up
- If You get divorced
- If you lose a dear one
- Acquiring new assets
- Losing an asset
- If you change your mind
Why Should You Have a Will?
Dave Ramsey explains that having a will is one of the most significant things to do for your loved ones after your demise. It ensures that your properties are well cared for. It also makes asset management clear for all–this eliminates the expense and stress of fighting in a court of law. However, Dave noted that dying without a will is one of the major causes of strife in families.
However, if you’ve not written a will but can’t adequately communicate for health reasons? He recommends that you harness the medical power of attorney and the financial power of attorney to solve the problem.
This option allows a trusted individual to act on your behalf. Dave says “it gives your a voice when needed.”
Do you need a lawyer to write your will?
Dave explains that making a will is easier than most people think. He recommends that most people should skip using an attorney if the estate is a modest-sized one. Here’s a Dave Ramsey formed survey for that.
However, he further explained that there are instances where you’ll need an attorney’s help. For example, if you own a large estate that you want to include in a trust, or you own assets in other countries, or you’d like to remove an individual from a will. Then he advises that you use an attorney’s help.But if it’s just a basic will for basics, like personal items, investments, kids, and property, then do such yourself. He even recommended that simple wills should be done online. Will made online is legally recognized.