I’m Not Very Wealthy, Should I Still Make a Will?

A Question of ‘When,’ not ‘If’

In their annual Wills and Estate Planning Study, caring.com found that only 32% of Americans have a will — a 6% decrease from 2023. Sadly, 40% of those surveyed claimed they didn’t have a will due to a lack of assets. This perception can be attributed to confusion around the costs and necessity of estate planning, particularly for those of modest means, and the tendency of many to underestimate the value of their assets. In the event of an unexpected death, assets can go to waste when a will is not in place.

So, who needs a will? Even you? Probably.

Let’s take a look at some of the fundamental considerations related to the estate planning process.

Estate Planning Basics

Estate planning can be an emotional process because it naturally conjures thoughts of dying and death. No one enjoys thinking about their eventual death and what will happen to their loved ones, pets, and property once they’re gone. One way to overcome this initial hurdle is to approach the process practically by considering the problems that can be solved with a solid estate plan, which will include powers of attorney and a will.

Powers of Attorney

At a minimum, every adult should have powers of attorney for financial and healthcare matters. These documents will grant a trusted family member or friend access to sensitive information and documentation they need in order to make important decisions on your behalf in the event of incapacitation. Such documents also allow you to memorialize your wishes about medical care, including end-of-life treatment, in advance so that others do not have to make them for you.

If you become incapacitated without having these documents in place, your family or friends may have to go to court to get the authority to care for you and your property. Court-supervised guardianship proceedings are often expensive and time-consuming compared with the cost of preparing powers of attorney.

Wills

A will allows you to outline how any assets you own may be distributed. If you are a parent or guardian, you will also be able to name a successor, which can reduce the risk of conflict when you’re gone. A will can also include trusts or other provisions to safeguard inheritance and provide instructions for how any children or dependents are to be raised.

As part of the drafting process, you will designate an administrator for your estate, commonly a family member, friend, or advisor. Banks and trust companies can also be named as estate administrators. The administrator will be responsible for overseeing the execution of your will.

Estate Planning as Protection

In the absence of an estate plan, key decisions about your assets are ceded to the courts and the state legislature.

In Illinois for example, if a resident dies ‘intestate,’ or without a will, certain assets will pass according to the default rules of Illinois law. These intestacy rules are meant to mimic what you would want if asked, but often, they are not on point.

Consider a spouse who dies prematurely and leaves behind both a spouse and minor children. The spouse will receive half the property, and the minor children will share the other half. This will require court-supervised guardianship of the children and leave the surviving spouse with only half of the couple’s savings. Or, consider a committed, but unmarried couple. Illinois law makes no provision for the surviving partner.

There may be many other ways intestacy rules in your state don’t address your particular wishes. A proper estate plan is the only protection you have against government intervention in your personal affairs after your death.

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[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can view at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

1. Real Estate Investing 101 Series 
2. The Start-Up/Small Business Advisor Series
3. Protecting the Principal: Business Insurance

This is an updated version of an article originally published on August 8, 2016 and updated May 4, 2020. This article was most recently updated by the Financial Poise Editors.]

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