When Should I Write a Will?

Most people do not consider writing a will or testament unless they are directly concerned about the loss of their lives or have been diagnosed with a terminal illness. However, there are many reasons why you should write a testamentary will well before you are advanced in years or diagnosed with a serious illness. Consider the guide below for information on the process of writing a will.

Signs That You Should Write Your Will

Listed below are the most significant reasons to write a will, regardless of your age or health. Remember that, while no one plans to pass away, not planning a will can make it complicated for your spouse, children, and family to manage what has been left behind.

  1. You Have Children and/or Grandchildren. You should include instructions regarding what money, items, or other accounts from your estate will go toward benefitting your children or grandchildren. If you are the legal guardian of any child under the age of 18, you should leave behind legal instructions for who gets guardianship over him or her in the event of your death.
  2. You Have a Spouse. If you have a spouse, you should write a will. This ensures that your spouse will be guaranteed to receive their due from your estate. This is especially important if you have a spouse and children, as your spouse will be financially responsible for your children on their own in the event of your death.
  3. You Have a Trust or Inheritance. If you have any type of inheritance, even if it is still in a trust, you will need to write a will. This ensures that your inheritance goes to a particular person or group of your choice in the event of your death. This can be written as a testamentary trust.
  4. You Want to Leave Specific Items to Specific People. If you have anything that you want to leave to a certain person or group, such as a charity or foundation, then you should write a will to ensure everything will be in legal order after your death. It is common for familial conflicts to occur over who gets what assets in the event of a death. If you want to give an individual or group something specific, a will is the best way to accomplish that goal.

What happens if you do not write a will before your death?

If you do not write a will before your death, your estate will be handled according to state laws. This will vary from state to state, but the state law may not line up with your intentions for the money, objects, and estate that you leave behind. This is why it is important to write a will if you have any specific intentions for your estate, or if any number of your family members will be relying on your estate in the event of your death.
If you are not sure when you should write a will, keep the above guidelines in mind.

How to Begin the Process

Before we begin listing the steps of the process, there is one vital thing you need to do first before you do anything else. This key step is finding an attorney or program that will guide you through the steps necessary to write your will. Different steps will need to be taken depending on your financial and familial situation to tailor your will to your needs.

Without an attorney present, you can mistakenly create a will without understanding some of your state’s guidelines, which could heavily complicate the process when you pass away. Or, if you don’t utilize the correct legal terms and language, it could be deemed invalid.

Although it may be nerve-wracking to have an attorney present, you will be helping yourself and your beneficiaries by drafting one.

  1. Choose a Beneficiary: Your beneficiary could be anyone from a spouse to a family member, friend, institution or organization. You can also have multiple beneficiaries if you wish to distribute your assets between certain individuals. This shows that you truly have free reign as to who you would like your beneficiary to be and how you can distribute your funds. If you have children, it may be smart to delegate them to be beneficiaries, especially if they have children of their own. For example, if you state that you would like your grandchildren to use your life insurance benefit toward their education should you pass away before they turn 18, your children could be excellent beneficiaries. This is because they will be able to handle and distribute the funds properly.
  2. Choose an Executor: An executor is the person in charge of distributing your assets according to the guidelines listed in your will. This person should be extremely trustworthy, as they will have a certain amount of power over your assets until they are distributed fully. Ensure your executor is available and willing to serve this role to its fullest capacity. This means it’s ideal to have someone within a close proximity to you, and someone who has experience with taking inventory of estates as well as handling funds and assets. You do not have to select a friend or family member to be an executor. However, if you select a third-party executor, you will have to be prepared to pay fees. The fees will be set by your estate and can vary in prices.
  3. Allocate your Estate, Be Specific: Once you begin to make decisions about which family member will receive which items or funds after your death, it is recommended to be as specific as possible to avoid later conflict. It is important to predict how each family member might respond to the situation you describe in your will. For example, if you have four children, and you state that all of your assets should be distributed equally between them, but one child insists on keeping one valuable item to themselves, conflict may arise.  Although it may be difficult to decide which family members receive which items, it is likely that your family will benefit from those choices in the future.
  4. Attach an Explanatory Letter: This is a step that is fairly self-explanatory, so we won’t spend too much of your time going over it. What you need to know is that an explanatory letter can serve as a way to comfort your family members and explain the conditions listed in your will. If you want to give a special item to a certain family member, there is no doubt that having a written explanation of your gift to them will be valuable. You want your family to be on the same page as you, which is another reason why you’ll want to include an explanatory letter.
  5. Sign Your Will: In many cases, states will require one or more witnesses during the signing of your will. Without witnesses or a notary of some sort, it’s possible that your will is going to be deemed invalid by the state government. Check with a lawyer or professional who specializes in assembling wills and testaments to find your state’s requirements.

Summary

It is important to plan for the future. Writing a will can be an emotionally draining and difficult process, but the peace of mind that comes with knowing your family will not have to distribute your estate is worth the effort. The Best Senior Services (TBSS) recommends enlisting professional help for the creation of a will, especially if you have many assets to balance and distribute.

If you need more help in understanding when the best time to write a will is, you’ve found the right place at TBSS. We educate and inform seniors about topics surrounding retirement so that they can spend less time worrying about their retirement years and more time enjoying it. Additionally, we connect seniors with local licensed agents who will help answer any outstanding questions.

Visit our website or call us at 877-979-8255 to get started today

Should You Consider a Whole Life Insurance Policy?

When you were young, purchasing an insurance policy that was just right for you was probably confusing and slightly overwhelming. As you got older, some of that confusion may have subsided, but insurance still seems like a lesson that you never truly stop learning.

 

If you have had term life insurance policies throughout your years, and it’s coming to an end, you have a couple of options: you can renew your old/current plan for another term, let your plan expire and go without life insurance, or you can switch to a whole life insurance policy. This is similar to a term policy, except it’s permanent and comes with no expiration dates.

 

This article is designed to help you understand more about what a whole life insurance policy is, and whether a whole life policy could be in your best interest.

 

 What is a whole life insurance policy?

Again, a whole life policy is a permanent life insurance policy, meaning that it will cover you for the duration of your life. In addition to a whole life insurance policy, you also have a separate account called “cash value.” When the term “cash value” gets thrown abut, it means that there is a cash amount given to the policyowner whenever the policy is cancelled. It is only applicable to permanent life insurance policies, so this is something that cannot be applied to term life insurance.

 

Many insurance agents suggest whole life insurance policies because they will have you covered for life. In fact, they will even suggest that you cover your children by getting a policy for them, too. Others, like Dave Ramsey, believe that whole life insurance policies aren’t worth it. So, let’s get into the pros and cons of this policy, so that you understand both points of view.

 

Advantages to whole life policies as a senior

Here are some of the advantages for seniors who have a whole life insurance policy:

  • Whole life insurance will pay benefits regardless of when you pass away. This is true as long as your policy is still in force. As soon as you pass away, your beneficiaries will receive the policy’s death benefit.
  • You’ll have an easier time finding coverage. It’s hard to secure term life insurance when you’re at a certain age. This is because a lot of policies are 10 to 20-year terms, and when you reach that age, it’s harder to guarantee you’ll fulfill those policies. As long as your premiums are paid on time with your whole life policy, you shouldn’t have too difficult of a time getting accepted.
  • It builds cash value over time. Cash value is built within your policy when you pay your premium. By doing that, some of it goes into a savings account, and once you have enough, you can begin to borrow from that account.
  • Premiums are predictable. Premiums will always stay the same and never differ, meaning you know how much you will owe on it each month. This can be relieving to know, especially when you have other bills to pay with fluctuating payments.
  • Living benefits are accepted on whole life insurance. Let’s explain this in a little bit more depth: if you are considering whole life insurance, one of the reasons for this could be because you are critically injured or ill, you will need to become a caregiver, or you are at the point in which you need care for daily tasks. Whole life insurance offers living benefits, in which you can receive a part of your death benefit if/when you are diagnosed with an illness or injury, or it is deemed that you will be needing care.

 

To make this a little easier to understand, let’s set up an example: You have a $200,000 whole life policy with living benefits, and you were recently diagnosed with Stage 3 breast cancer. Upon contacting your carrier, you discover that you can receive $50,000 for treatment and care. This leaves you with $150,000 for your death benefit that will be disbursed to your beneficiaries.

 

You can do this with term life policies, but there’s something that you need to consider, and that is when your policy expires, your living benefits expire along with it. When your term ends, it’s possible that you will have to purchase separate plans that could cover a potential future illness.

  • You have control over your account. There are a lot of financial services you will sign with your insurance company in which you don’t have complete control over. Luckily, this isn’t the case for whole life insurance. In fact, it’s the opposite. When you sign a contract with your insurance company. You can access this account and use the money for anything you need.
  • It’s possible that you can receive dividends from your whole life insurance policy. You can receive dividends once per year, typically around the end of the year. You can expect dividends if the insurance company has paid off its fees and is deemed profitable. In this event, it will return payments to you, known as dividends. Not to mention, you will not be taxed on these dividends.

 

Disadvantages to whole life policies as a senior

Here are some of the disadvantages for seniors who have a whole life insurance policy:

  • It is expensive. And by this, we mean that there are cheaper options out there. Typically, the cheapest life insurance is term life insurance. And if you’re in great health, getting term life insurance may be the better option for you.

 

The cost of your whole life insurance policy is dependent upon a number of factors, so it’s hard to determine what you’re going to be paying until everything is finalized. This includes age, health, habits, how much coverage you need and more. One thing that you can bet on, though, is that your whole life policy will cost more than any term policy you would have had.

  • Loans require interest. Essentially, if you want your money out of the policy, you either have to cancel the policy or borrow your own money. And that requires interest. This may not sound like news to you because almost every loan out there comes with some sort of an interest fee. But when you think about it, this can present itself as a major disadvantage. You are being charged interest to borrow the money you paid into the policy.
  • It’s not the most flexible option. Once you select your coverage, it cannot be changed. This means that, your coverage will not be increased or decreased depending on what your needs are. Premiums are also adjustable. This means that if you are unsure about your financial future, this may not be the best option for you.
  • Your beneficiaries won’t receive everything. When you pass away, your beneficiary will only be receiving the death benefit, while the insurance company will receive the cash value. Your beneficiary cannot receive both. This may sound frustrating to most, and it’s with good reason. You are paying into a savings account that you don’t get to use unless you are borrowing from it. And, even then, we circle back to the interest fee that has been previously mentioned.
  • It’s not the best tool for retirement planning. Although you certainly can use parts of it – like the case value – for your retirement planning, it’s not in place so that you only have to rely on this policy. A great way to plan for your future is to invest your savings into your IRA accounts, as well as your 401(k) or 403(b).
  • Some don’t have the financial stability to maintain a whole life insurance policy. We understand that this sounds like a scary concept. And, unfortunately, it’s true. In the event that you experience financial catastrophe, and you are unable to pay your premium, your cash value will be able to cover it. However, your cash value is not designed to pay off your premiums, and it’s certainly not built to last forever. This means that, after a certain amount of time, if you are still unable to pay for your premiums and your cash value runs out, then your policy will disintegrate.

 

 

You may be coming away from this article thinking that you may need whole life insurance, or you may be thinking that you could never trust any insurance agent who will try to sell this to you. If you’re feeling the latter, don’t worry. At The Best Senior Services, we can help you. We will connect you with a local, licensed agent who will work with you on selecting the best policies for you.

Regardless, whether you should consider a whole life insurance policy is solely up to you because no one knows your situation like you do. If you meet with an agent who does not provide you with a specific way in which you will want to consider whole life insurance instead of term life insurance, then consider other options. The Best Senior Services will be happy to provide you information about financial services so that you can enjoy your retirement years. Call us at 855.979.8277 or visit our website today to get started.