Writing an estate plan is often associated with the wealthy, but the truth is, everyone, should have a Will, regardless of their financial circumstances. Even if you're on a tight budget, a Will is a crucial legal document that ensures your final wishes are honored, and your loved ones are taken care of. In this article, we explore how and why to write a will, even if you're broke. So grab a pen and paper - or a stylus and an iPad - because it's time to secure your legacy on a shoestring budget.
Why Write a Will?
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Reason No. 1 to Write a Will: To Protect Your Legacy
Regardless of your financial situation, a will allows you to specify how you want your assets to be distributed among your family, friends, or charities. By making your wishes clear, you alleviate potential conflicts and ensure your loved ones are taken care of the way you wanted them to. In essence, a Will is a way for even broke people to say how they want to be remembered by their friends and family! That’s worth doing.
I know what you’re thinking: “I don't really have any valuable assets, so there’s nothing for the Will to leave!” That’s not entirely true. Do you own a car? Do you have your grandfather’s Purple Heart? Have a comic book collection? Own 100 albums on vinyl? All of these are beloved items that you probably don’t want dumped at Goodwill without a second thought. You might think that “everyone knows” you want to leave your record collection to your niece, a budding music fan. But in reality, people probably don’t know that and won’t be able to do anything about it unless you have a Will.
Without a Will, the probate court will appoint an Executor and that person will get to decide what happens to all of these items. The court’s Executor isn’t going to care about your relationship with your niece; he or she will only see an asset that can be liquidated.
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Reason No. 2 to Write a Will: To Name a Legal Guardian for Minor Children
If you have minor children, a Will is essential for designating a legal guardian to care for them in the event of your untimely demise. Without a Will, the court may have to make this decision for you, potentially causing distress and uncertainty for your children. “But,” you’re thinking right now, “I want my children’s other parent to take care of them. Case closed! I don’t need a Will!”
Wrong. This is only half of the story. What if the other parent dies before you? Or what if they die after you before your kids even turn 18 years old? You won’t be around to say what you think should happen, but if you made your opinions known in your Will, you will be able to influence the process even though you’ve been gone for years. That’s a great gift to give your kids.
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Reason No. 3 to Write a Will: To Avoid Dying Intestate
Intestate laws are default rules that determine how assets are distributed when someone dies without a Will. By writing a Will, you can have control over who receives your assets rather than leaving it to the state's predetermined rules. The biggest reason to do this is to avoid the P-word. Or the Three P’s if you will: a Protracted Probate Process.
Let me address a common point of confusion about probate. You don’t get to skip probate if you have a Will. “But then why bother with a Will at all if it still goes to probate court?”
Glad you asked. Probate with a Will is vastly different from probate without a Will. If you have a Will, then your case goes to the front of the line. The Will is considered validated already, which means the court recognizes that you made it. The Will appoints an Executor, and that person can get started right away, which means your heirs will get their inheritances much faster.
If you die intestate, your case goes to the back of the line. The court will need to validate the Will, which causes delay. Your heirs have to wait until the court appoints an Executor. The Executor will have no prior knowledge of you, your family, or your financial circumstance. The Executor will be compensated from your estate, which further diminishes the estate’s value. Trust me, you don’t want to be in this position, even if you think you’re broke.
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Reason No. 5 to Write a Will: To Take Care of Your Pets
Most Americans have either a cat or a dog. You might be single and broke, but I know for a fact that you care about the fluffy little monsters who live with you. What would happen if you died unexpectedly? Who would take custody of your pets? Would they end up at the pound? If you don’t have a Last Will and Testament, you won’t be able to have a say in what happens to your pets. But if you include them in your Will, your instructions will be legally binding.
How to Write a Will When You’re On a Shoestring Budget
Now that I’ve clarified the three main reasons to write a Will even if you aren’t rich, let’s go through the basics on how to write an online Will.
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Step 1: Identify Your Assets
Start by making a list of all your assets, no matter how modest they may seem. This can include bank accounts, personal belongings, vehicles, and any other valuable possessions. Even if you don't have significant assets, it's important to account for everything you own. That means your video game collection and your cryptocurrency account should be top of mind.
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Step 2: Identify Your Beneficiaries
Think about who you would like to receive your assets. This can include family members, close friends, or charitable organizations. Be specific about what you want each person or entity to inherit.
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Step 3: Choose an Executor
An Executor is responsible for carrying out the instructions in your Will. Select someone you trust, preferably a responsible family member or friend. Discuss your decision with them beforehand to ensure they are willing to take on this role. Try to name an alternate person just in case your first choice is unavailable or unwilling to serve.
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Step 4: Select an Online Will Service
Just because you’re tight on funds doesn’t mean you can’t have a legally sound Will that protects your family. You have a small estate, so you probably don’t need a lawyer. Instead, opt for an online will-making service like FastWill, which can provide valuable guidance to ensure your will is legally valid. The advent of AI-powered estate planning tools opens the door to people regardless of budget or social status, in the same way that online stock trading made it possible for everyone to participate in wealth creation. FastWill is the best and most affordable option for people who are on a budget. You can have a legally binding Will in just minutes.
