A will allows you to distribute your worldly goods, select a guardian for minor children and name an executor to carry out your wishes.
But you should be aware of what a will can't or shouldn't do. This is particularly true if you're drafting your own document without an attorney's help, since you could unknowingly make a mistake that upends your whole estate plan.
A will can't avoid probate, the legal process that typically follows death. In probate, your will becomes a public record and the court supervises the distribution of your estate.
In many states, probate isn't particularly expensive or lengthy. In other states -- such as California and Florida -- probate can be costly and time-consuming, which is why many residents wish to avoid it.
A common way to bypass probate is to create a revocable living trust and then transfer ownership of your real estate, accounts and other property into the trust. You retain control, but upon your death, the person you name as your successor trustee can distribute your property without a court's involvement, says Matt Palmer, associate product counsel at online legal site LegalZoom.
You can avoid probate using other means. Jointly held property passes directly to the other owner, bypassing probate. Accounts with beneficiaries, such as life insurance and retirement funds, can also avoid probate. You may be able to use "transfer on death" or "payable on death" documents to designate beneficiaries for other financial accounts. Some states have transfer on death deeds for real estate or transfer on death registration for vehicles.
Your will can't override a beneficiary designation or change who inherits jointly held property, Palmer says. For example, if you forget to change the beneficiary of your life insurance from your previous spouse to your current spouse, your ex usually will get the proceeds regardless of what your will says.
You also can't leave property to pets with a will or any other estate document, since pets are considered property, Palmer says. You can, however, use your will to designate someone to care for your pet and leave that person money to do so.
WHAT WILLS SHOULDN'T DO
You may see your will as a way to finally force people to do what you want. You could leave your nephew a bequest that he receives only if he finally finishes college, or stops smoking, or meets some other condition.
But putting conditions in a will is often a bad idea, says Betsy Hannibal, senior legal editor at Nolo, a self-help legal site. Some conditions -- such as requiring someone to marry, divorce, or change religions -- aren't legally enforceable because they're considered contrary to public policy, Hannibal says.
"Such clauses would include conditional gifts that try to control recipients' protected individual freedoms, like their marital status or religious beliefs, as well as gifts that would require the recipient to do something illegal," she says.
Other conditions are simply unwieldy. Someone must oversee the bequest and decide when the conditions are met, which might be difficult or take a long time, she says.
If you want to impose conditions, consider paying for an attorney to set up a trust rather than using a will. Expect to spend $2,000 or more, Hannibal says. You'll need to appoint a trustee, who may need to be paid from the trust for their services. Also, when the money is in the trust, it can be subject to high trust tax rates. Only you can decide if putting strings on an inheritance is worth the extra cost.
Another time to use a trust is when you want to leave money to someone with special needs who is receiving government benefits. Even a relatively small bequest could disqualify them from essential benefits such as Supplemental Security Income and health insurance coverage through Medicaid. Special needs trusts must be carefully drafted to be effective, so consider consulting an experienced attorney.
Technically, you can disinherit your wife or husband in your will. In reality, disinheriting a spouse can be extremely hard to do.
"Every state has a mechanism that protects a spouse from being completely disinherited," Hannibal says.
In community property states, a spouse generally has a legal right to half of the property acquired during a marriage, regardless of how the property is titled. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In the other states, including Arkansas, a spouse usually has a right to claim one-third to one-half of the estate, regardless of what a will says.
A spouse can agree to be disinherited in a prenuptial or postnuptial agreement, or they can "disclaim," or refuse, an inheritance so that it goes to other heirs. If your spouse is willing to be disinherited, consult an experienced estate planning attorney for help drafting the appropriate documents. If your spouse isn't willing, you can talk to the attorney about your options, but understand that disinheriting them may not be possible.