Start the New Year Off Right
Start the new year off right with a will or trust that protects your personal assets. The year-end holidays are the perfect time to reflect on things you want to do differently in the new year. Re-evaluating your financial holdings and other material possessions should be part of that process. Nearly 70 percent of Americans do not have wills. When it comes to estate matters, preparation is the key to ensuring you have the final say over your belongings.
Why wills are necessary
Americans collect a lot of stuff in their lifetimes. One in four Americans has a clutter problem, which can pose significant challenges to loved ones after their deaths. Even when you have prized possessions with real value, leaving the sorting of those things to bereaved family members and friends can cause tension. The responsible thing to do is to create a will that clearly states how you wish to allocate your financial holdings and other personal assets.
When someone dies without a will, those decisions can be placed in the hands of a court or other legal representative appointed to oversee the matter. In New Mexico, probate law designates to which surviving family member your estate passes in the absence of a will. Other surviving family members may not agree with the decision, which can spark a formal challenge in court. Providing for the allocation of your belongings after your death can help avoid this kind of a mess.
How to draft a will
While it is possible to draft your own will, working with an estate attorney ensures the document passes legal muster. Here are some of the most important things your attorney must recommend for inclusion.
- Use the appropriate verbiage. The wording of the document must be clear on the intent. Most wills include some version of the phrase, “This is my last will and testament.”
- Include personal information. Basic information such as your full legal name, date of birth, and most recent address must be included in the will. Any aliases must be included to cover all your bases if the will is challenged in court. Names of your immediate family members can be part of the document.
- List all assets and property. This can be done in one of two ways. You can list all possessions without assigning a beneficiary to each, or you can indicate which asset should go to whom.
- Designate beneficiaries. If you have not already done so as part of your listing of all assets and property, then include a separate section detailing beneficiaries by name.
- Establish a guardianship. In the case of minor children, wills should contain the name of the preferred legal guardian. This also can apply to disabled or elderly adults for whom you serve as a caregiver.
The final step in drafting a will is to sign it. New Mexico law requires you to sign your will in front of two witnesses, who also must sign the document. Our firm recommends not having witnesses who are named as beneficiaries to establish impartiality.
What is a trust and why do you need one?
A trust protects and maintains assets for your exclusive use. Those assets then pass to designated beneficiaries after your death. Trusts and wills are not the same, but they do work together to create a complete estate plan. People who have children usually include a trust in their estate plans because it can be used to ensure minor children receive any inheritance you designate for them once they become of age.
Some other benefits of trusts include:
- Protecting assets from creditors.
- Eliminating probate time.
- Reducing estate taxes.
Working with a skilled estate planning attorney can help you determine if a trust should be included as part of your estate plans.
Which type of trust do you need?
Several types of trusts exist. The one you choose depends on how you wish to use your estate plan to control your assets. Here are some of the choices for trusts:
- Revocable living trusts permit the transfer of your property into a trust throughout your lifetime. You can modify or revoke it at any time. Revocable living trusts help avoid probate and preserves your privacy.
- Irrevocable trusts provide the same benefits as revocable living trusts with one exception. Once created, it cannot be modified or revoked without the beneficiary’s permission. A benefit to this kind of trust is it relieves you of tax liability for assets covered under the trust.
- Special needs trusts work for families with children or other loved ones with special needs who require long-term care.
Choosing the right Albuquerque estate attorney
Trusts and wills can be complicated documents. Working with an estate attorney with in-depth knowledge of probate law in New Mexico can help ensure your final wishes are honored. Atkinson Law Firm wants to help you get started on the right foot in 2022. Reach out to us at 505-944-1050 or contact us online to schedule your no-obligation consultation in the new year.