Do You Need A Will If You’re Young, Single, Or Have No Assets?
Do you have a will? What’s a will you ask? Well, I’m here to help you understand exactly what that word may mean to you no matter your age, income, or relationship status. A will is something people don’t usually think about until they are on their death bed. The planning that goes into this legal document should take place way before that happens though.
Do you need a will if you’re young, single, or have no assets?
In short, yes. Everyone, no matter their net worth, age, or marital status should have some form of a will. A will can be as easy as a 1-page word document or as complex as a packet that a lawyer draws up. There are a couple of different types of wills as well as information that needs to be included in each one. All of this will depend on your personal situation and what you want for your estate when you pass. We will discuss those things and much more throughout this article.
Before we even get into it, let me give you my disclaimer (because I have to).
Young, Dumb, and NOT Broke?! LLC (me) is not providing any legal or financial advice. The views and opinions expressed are only those of the author who wrote them. In no case, shall the reader take anything as legal advice and shall accept the information for what it is.
Okay, now that we got that out of the way, let’s get into to whether or not you need a will if you’re young, single, or have no assets.
What Is A Will?
The best and easiest description to understand of a will I could find was from Investopedia. They describe a will as a “Legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children”.
The way I look at it is that a will is simply a playbook for when you are no longer on this earth. It is an unavoidable truth that we are all going to have to face death someday and while it may not be a fun topic to talk about, it is a conversation that we need to have. Along with that conversation, there is some planning that needs to take place beforehand.
Want your ashes spread in the Atlantic ocean? That can be in a will.
Want your favorite grandchild to inherit your whole estate? Sure why not.
A will can include almost anything, not just cash. But you need to take certain steps to make sure your will is executed exactly how you want.
The best way to do this is through something called a testamentary will. This basically means that you write the will and when you go to sign it, you have several witnesses. The main benefit here is that no one can ever argue if that was your true wish or if the document was doctored. This type of will has the best chance to stand up in court if anything is up for debate and has to go to a judge for decision. That’s an extreme example though.
There are other types of wills like one that you handwrite and sign without witnesses. As well as one where you simply tell people your wishes. I would highly recommend against these as they can be easily challenged on whether that is what you truly wanted or if you even wrote/said that.
Why I Think Everyone Should Have A Will
We have already discussed that the main reason to have a will is to designate who gets what when you pass so why do you (a young, single person with little to no assets) need one? The simple answer here is because none of us know what tomorrow will bring.
No one knows when their number will be called and unfortunately, people go too young but that is life. It doesn’t matter if you are 20 years old or 80, when it is your time, there is nothing we can do about it.
Since 55% of Americans don’t have wills, they are obviously making the bet that they will be around for a long time. Time will pass and even when people reach an older age, often they still don’t make this simple document. Fortunately, that 55% is better than the people who voted on my Twitter poll last week.
85%?!? That is scary, to say the least. My guess is that most of these people believe that wills are simply for old people, which is not the case.
Now I don’t know about you, but I have heard of some ugly family fights over how assets should be split up when someone passes and I want to avoid that at all costs. These fights break up families that have been close for generations and it’s a terrible sight to see. What makes it even more awful, is that those fights could have been 100% avoidable with a simple document.
In addition, a will usually outlines how the funeral costs will be paid. The average funeral in the US today costs anywhere from $7,000 to $10,000. Seeing that most people don’t have $1,000 in cash, that funeral cost is a real issue that a will addresses.
What’s In My Will
I would be a hypocrite if I wrote this article but didn’t have a will myself. Yes, I have one and I have had one since I was 20 years old. I have a lot more assets to my name now but even then I knew that it was important to have the document created.
What made me come to this realization was when my brokerage account asked me if I wanted to add anyone to my account that would inherit it if I were to die. I did this and immediately thought “why don’t I do this for everything?”.
When I first wrote my will, it was a single page word document. To this day it still is that same document, only updated. I store it with other important documents that I have like my social security card and passport so in the event that my time is up, it will be easy to find.
My will is nothing crazy and yours most likely won’t be either. The point is to just have something.
Going over my will line by line would be boring but here are some highlights to give you an idea of what you may want to include in yours:
- A list of all of my accounts (checking, savings, retirement, swing trading) and a beneficiary designated for each one.
- A plan to sell my real estate and vehicle and use the funds for funeral costs and any other debt I may have.
- I want a % of my net worth donated to a couple of different charitable causes. Using a % here is easier than a set number because my net worth is always changing.
- A list (roughly 25 items long) of things I own that I think have good monetary value and who I would like them to go to.
- I have a chosen family member as the executor of my will. If they are also deceased I have a backup as well.
Hopefully, in the future Young, Dumb, and NOT Broke?! will be a business that is worth something and I have already decided what I would want to happen if I needed to pass it on.
What Happens If You Don’t Have A Will
While not having a will may cause some ugly family fights, it isn’t the end of the world. When you are young, you typically have few assets so there isn’t that much to divide up. No matter your age if you do pass, then how will things get split up?
Well, that is where things can get slightly complicated. When you die without a will it is called intestate. When this happens the state will then oversee how your assets are split up. Each state has different laws but for the most part, they are similar.
If you pass and are married then most of the time your entire estate will go to your spouse. This is the easiest form of passing away intestate. If you have children then they will each get their fair share, which is decided by the court.
Something I want to highly warn against is having a life partner, this is someone you are with but not officially married to (recognized by the state), and not having a will. For the most part, if you pass away that person will not be entitled to anything. It doesn’t matter if you have been together for 50 years you aren’t officially together in the state’s eyes.
Again, this is all easily avoidable by having a will.
How To Get Started Making A Will
Okay, I’ve told you why you need a will, what happens if you don’t have one, and even some personal information about my own will so how do you get started? This is easier than you think and a little extra work now will save you and your family a ton of headaches in the future.
The first thing you need to do is list out any and all of your assets and things you have custody over (ie. children). This doesn’t just mean cash in a bank account. Anything that has monetary value is considered an asset. Here is a list of things that come to mind:
- Checking and savings accounts.
- Retirement accounts (401(k), Roth IRAs, SEPs)
- Homes/real estate
- Collectibles (coins, guns, baseball cards, etc.)
- Intellectual property
- Any final wishes
After that, it’s up to you how you want these things split up.
Personally, I highly advise against stating you want everything “split up fairly” between your beneficiaries. The term fairly is highly subjective to who is interpreting it and can cause some big issues. Here is an example.
Let’s say you have $10,000 in cash and an extensive baseball card collection that you want to be split evenly between your two children. In a perfect world, each child would get $5,000 and half of the cards but who puts the value on each card? Each child gets a different appraiser who gives them different values and the fighting begins.
What should be a time of grief, has quickly turned into a selfish fight.
This is why I think a will needs to be as specific as possible down to the item. That way there is no arguing.
If you can be overly specific, down to the nitty-gritty, and have a testamentary will, then you will avoid any confusion. Taking the extra time here is well worth it. Death is hard enough for families to deal with so if you can make it easier on your loved ones, why wouldn’t you?
The Bottom Line
I hope by now I have convinced you that no matter if you are young, single, or have no assets you still need some form of a will. You don’t need a fancy lawyer in a tacky suit to draw you up legal documents that are 100 pages too long. No, instead you can do it all at home on your computer in a weekend.
Take the time to sit down and think about what you truly want for your estate and even your life. Yes, there are other things you need to decide on besides just assets like who will have the power of attorney over you if you become unable to make decisions. Let’s take one step at a time here and save that for another article.
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