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No one likes to think about it, but preparing for the unexpected can give you some peace of mind now and protect your loved ones later! This is the essential guide to wills and estate planning for busy parents!

Creating or Updating Your Will

No like to think about it, but preparing for the unexpected can give you some peace of mind now and protect your loved ones later!  This is the essential guide to will s and estate planning for busy parents!

So heads – this episode's topic and interview were planned and done before things changed these last few weeks due to Covid-19.

I say this because I’m not trying to add to the anxiety.

I believe that if you are staying home and you’re healthy, now would be a good time to take care of certain matters that maybe have been on the back burner because you haven’t had much time.

And taking care of your wills, picking legal guardians, and making sure your life insurance is up to date – these are important.

So I decided to stick with the schedule on this episode.

There are so many we can’t control. It can be empowering in a way to focus energy on the things we can.

But when you making or updating your will, it may seem that’s too big of an issue to tackle.

Today I want to break it down into manageable chunks so you can make some progress on that.

Alison Kade from Fabric is here on the show today to decode and explain the essentials of how wills work. 

In this episode we’ll discuss: 

  • Why you need to plan now
  • Basic terminology every couple should know
  • How parents can prepare for the unexpected

Let’s get started! 

Resources on Estate Planning

If you want more information about setting things up for your loved ones and mage your money now, here are some resources to check out:

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Meet Fabric

Fabric is committed to bringing financial products for new parents into the modern age, with an experience that is simple, affordable, and beautiful.

Fabric makes it easy for you and your spouse to understand and apply for affordable term life insurance. And then manage it conveniently from the app or online.

Think you don't have time to create a will? Get a 100% free will from Fabric. Set guardians, choose beneficiaries, allocate assets, and you can finish in as little as 5 minutes.

When Do We Need to Get Our Will Done?

Elle Martinez: When some people think of wills, they feel as if it's only for those who have a certain level of income or wealth, but a will can be a handy and necessary document for many couples and families.

Allison Kade: There are two main reasons that I see for wills in particular. So the first most obvious is it is a chance to pass down your literal stuff to gays who died to the people that you care about.

And a lot of people don't really feel the need to think about that. If they are healthy and doing well and also one of the things that I hear most often is I don't even have a lot of assets. Why should I bother?

I think that the response to that is, do you have a checking account? Do you have a savings account? Do you have a forum and can't work? Those are assets.

Additionally, you know, do you have something sentimental? You have your keyboard or electric keyboard that you really want to pass down to your little brother because he loves it?

I mean, that is a thing that you can designate in a will. But beyond that, one of the biggest reasons that people start thinking about wills and estate planning is when they have kids, because a well is the main place where you can designate a legal guardian for your kid.

So if nothing else, even if you are like, oh, I am not materialist, you know, give away my computer to whoever you want, end. If you have a kid, I feel like it's very important to make a will so that you can state your wishes on who should take care of your child. If you weren't around.

Decoding Legal Terms with Wills

Elle Martinez: I want to say about a year after we got married, we had a very basic will done.

It was some software that you could sign up for – [we] knocked it out and we forgot it for many years. But when we became parents, we knew that we wanted to be very deliberate, very careful with how we plan things.

And so we took a second look at the will. And honestly, it was a little overwhelming because of the terminology.

The good news is you don't have to become an attorney to understand how wills work. So we're just going to tackle a few of these major terms today.

And yes, I'm going to drop the disclaimer that this isn't legal advice. This is just for you to feel more comfortable expressing what you want in the will so it can better reflect what you to value and will want to have handled.

What's an Executor?

Allison Kade: In simplest terms, the executor is the person who does the stuff right. So you say that you want to give that electric keyboard to your brother. Your brother lives in another state.

How is that getting there? Whose are you? Are you mailing this keyboard? Who knows?

The executor will figure out that weird stuff. You know, the beneficiary will, let's say, receive funds from whatever assets you have. Who is literally writing the check? That's the executor who is actually making sure that things are administered according to the will, because as much as you can state your wishes.

You're not around. Someone has to liberally make sure that those wishes are fulfilled. That is the executor. And it can be a very stressful and challenging role.

I've actually seen it firsthand. So my husband was the executor of his grandmother's estate and other beneficiaries included his bajillion siblings. And so and one of whom was under twenty-one. So a trust had to be in her name and administered.

So he's the executor, but he ended up needing to also become a trustee of this trust. That was only going to be active for a couple of years.

So like all of these complicated things, he is just the guy who made things happen. You know, he spoke to the lawyer. He dealt with the estate. A painting had to be brought from Texas to New York. He figured out who the movers, how that works, like the stuff that's the executor.

Mirror Wills for Couples

Elle Martinez: Another thing couples should consider when creating their wills is make sure that there aren't conflicts between the two documents.

Alison Kade: While it is theoretically possible for couples to have one document to represent both of their wishes, often people might recommend that you have two separate documents.

Just in case there's like, what if you get a divorcee? Now both of you have to redo everything. Like it's often you're to act like what if one of you dies? But it's actually a joint will.

It can often be easier to have two separate documents, but you want to make sure that they're aligned. So let's say my husband and I had two different wills.

I said two totally different things and we both died together. But my will says that all of our stuff goes to my sister and his will says that all of our stuff goes to his sister.

So a court is going to have to duke it out because our wills don't agree and they conflict. So one way to help make things easier after you're gone and resolve potential strife is to make sure that your wills match each other.

And so this concept, if you have a will, that is pretty much the same and aligned on your choices, except it has each of your names on it is often called a mirror will.

And so my experience with this is through fabric, which offers a free online will. And one of the options that fabric offers is a mirror well. So I found that even in my case too, there's often one spouse who's like a little bit the ringleader, i.e. I was like, okay, we're making wills and I make the will first. Then I sort of forced my husband to do it.

And in this case, with a tool such as fabric, I could make my will choose all the choices, and then I could create a mirror version for my husband that swaps out our names. If he's my beneficiary, it's me. His like it does that swap in an intelligent way, but everything else is the same. So his choice for who should take care of our daughter is the same as mine, etc..

Now he obviously has to buy it. I can't make a will without it. And so that reflects the fact that we need to have a conversation. He has to sign it himself, but it saves time. And also importantly, it kind of forces us to level with each other and make sure that we're aligned.

Elle Martinez: Talking about money is always a plus in my book. So if you haven't already, make it one of your money dates where you don't have to bring out the legal stuff but talk about some of those main points.

Just opening up the conversation may allow you to see where you guys sync up really easily and if there's something that you need to hash out.

Legal Guardians for Your Kids

Elle Martinez: If you have kids, you have a big decision ahead of you, which is deciding who do you want to take care of the kids? Should something happen to us at the most basic level?

Allison Kade: I think you can start by thinking about who will raise your child in a way that aligns with yours.

So who will give your child the kind of life that you want your kid to have? Whether that's most similar to how you would have done it, or just perhaps you could imagine them being part of that family and having a good life.

I think that layers beyond that include, frankly, who wants your kid? So it's often very flattering to be asked. But having these conversations can reveal interesting things.

So, for example, I chose my sister as my daughter's legal guardian because she already has a child and I like the idea of my daughter growing up with her son and they would be pseudo siblings. They already have a family life. My daughter already has a relationship with my sister. So that's something also to think about.

What is the child's relationship with this person? But there's a world in which I could have asked her and she could have said, yeah, I mean. Oh, my son's a handful, but I guess maybe there was some. You didn't say that, but she could have.

And then there's a chance that someone else in your life could surprise you that perhaps they don't have kids. And it's revealed they have a lot of space in their life and would love to take on this responsibility.

So I think. Who do you most envision as, frankly, doing a good job and who can take on that role in terms of space in their life and commitment? And who is your child most connected to as well?

Elle Martinez: This is definitely a discussion you don't want to rush. So sit down and talk about what are the most important things for a potential guardian to do or have and then come up with the list.

When you can talk with the potential guardian or guardian to you're thinking about about your wishes to see if things mesh up well.

Understanding Trusts

Elle Martinez: If you are parents and you do have some assets that you want to pass on to your children.

You may think about setting up a trust which can be a bit confusing if you're not familiar with how they work.

Allison Kade: So and again, I should say, I'm not a lawyer. Talk to a lawyer for your own individual situation, etc. etc.

But at the most basic level, a will dictates who your assets should go to and a trust can dictate how those assets should be passed.

So for example, if I wanted to dictate that my daughter should not be able to. So she can inherit my assets, but not until she's 30, I will alone. Can't do that. You would need a trust to do that.

If I wanted to put in what's known as a spendthrift clause, let's say I want to pass on asset to someone who I kind of think maybe is irresponsible or has addiction issues that might give me the ability to dictate how they can access the money, what they can use it for.

It lets me put someone else in charge. It is a layer of complexity that isn't always required across the board, but in many ways, it makes sense, especially if you are passing money down to children.

Elle Martinez: So I hope these explanations make creating and updating your will much easier.

Updating Your Will

Elle Martinez: And I do want to point out how important it is to update your will.

Circumstances change and you want to make sure that your will reflects the people that you want to take care of and the assets that you want to pass on to them.

Allison Kade: Everything can be updated and changed over time. So my sister is four years older than I am and I'm pretty quite certain that I remember conversations in which most of our childhood are and was our legal guardian and the will if something happened to my parents.

When my sister went to college, I was over 18. I was already in high school. And there was a conversation in which I'm pretty sure that for about four years there, my sister was my legal guardian.

And the will, because they were like, look, we got a responsible kid. She's not the kind of kid who's gonna blow all this cash at 18. She is the kind of kid who will step up and take care of her little sister, her. So they made that change.

You can always update based on the actual people and their actual circumstances.

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Music Credit

Like the music in this episode? Our theme song is by Gentle Regime. Additional music by Lee Rosevere.

About Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..