Oftentimes, people are under the impression that if they don’t have substantial wealth, there’s no reason to have a will. But there are multiple types of wills that serve very different functions. Wills are for much more than allocating funds. They are critical resources when it comes to being prepared for the future.
When you think about creating a will, you are likely thinking of a last will and testament. A last will and testament is generally used to lay out your wishes for after you pass away. You can determine how your property and assets are divided and among whom. From your car to your comic book collection to your cat, you can decide who gets what. You can choose an executor of your will to handle your financial obligations, such as selling your house and paying off any debts with the proceeds.
If you have minor children, you can name a guardian for them in your will. Most people have a preference as to whom they would like to raise their children in the event they are unable to. Perhaps you’ve verbally told that person you’d like for him or her to do so. But unless you have it legally documented, it is not officially binding.
Another type of will is a living will, which is also called an advance directive. Living wills provide caregivers with your wishes when it comes to decisions regarding end-of-life care. You could also select someone else to make those decisions on your behalf in case you become unable to do so yourself.
Both types of wills give you the opportunity to take charge of final decisions and are critical elements in estate planning. Whether you consider yourself to be affluent or not, a last will and a living will are invaluable assets.