Questions you’re asking: Why do I need a will?

It’s hard to think about a will without also thinking about your own mortality, which could explain why roughly two-thirds of Americans don’t have a will. But Matthew Mozer, senior wealth strategist for Wells Fargo Wealth & Investment Management, says that the benefits of including a will in your estate plan should outweigh any potential discomfort.

“A will provides clarity around how you want your estate to pass to beneficiaries and in what amounts,” he explains. Basically, it’s a way to help make sure your estate plan wishes are followed. Here, Mozer shares what everyone should know about a will, along with a health care directive and a durable power of attorney.

A will offers a sense of security for you and loved ones

“Without a will, your estate will be distributed according to state law,” says Mozer. “That means your assets may not be distributed as you intended.” In this scenario, the state determines who inherits your estate (usually a spouse, a family member, or a friend), and that person is left to make decisions without any additional guidance or reference to your wishes. This could negatively impact family relationships, cause unnecessary emotional strain, or result in costly probate disputes.

Another important component of wills that people often overlook: They designate guardianship of surviving minor children. Who should take care of your kids when you’re no longer able to? Who should oversee their inheritance until they come of age? These are questions a will can help you answer.

Include these two important documents in your estate plan

Mozer says that there are two other legal documents that should be part of your estate plan.

• Health care directive: Also known as an advance directive, this document authorizes someone you know and trust to uphold your preferences for medical treatment if you’re unable to make those decisions for yourself. “Think of a catastrophic event where you’re alive, but unable to communicate or make medical decisions,” says Mozer. “A health care directive lets someone act on your behalf.” Without a directive, even simple decisions — such as accessing medical records or consenting to procedures — could become difficult for family members.
• Durable power of attorney: This document grants a designated person authority over your financial matters — like paying bills, managing investments, or handling real estate — if you become incapacitated. Without this document, family members could face significant legal barriers when managing finances on your behalf.

Mozer says that an estate attorney typically helps people set up these documents when they’re creating a will as part of their estate plan. “Most people know about wills, but they may not be thinking about a health care directive or durable power of attorney,” Mozer says. But they’re just as important. “They could potentially come into play sooner than a will does.”

Five tips for setting up a will, health care directive, and durable power of attorney

While estate attorneys make the process of setting up a will, health care directive, and durable power of attorney straightforward, Mozer recommends following these best practices for your estate plan:

1. Identify the right fiduciaries. The executor of your will, potential guardians, and any necessary trustees should be suited to perform the respective duties you have in mind — and in a way that reflects your values.
2. Determine your beneficiaries. Who should receive your assets and tangible property? All recipients should be clearly named to avoid ambiguities.
3. Designate your asset distribution. This includes both significant financial assets and items of sentimental value, like jewelry, art, or vehicles.
4. Review and update regularly. Mozer recommends reviewing your estate plan and making necessary updates to your will every three to five years or after major life events (birth, death, marriage, or divorce).
5. Create a balance sheet. A trusted financial advisor can help you make a detailed list of your assets so that your executor understands the estate’s full scope and can administer it smoothly.

Common mistakes to avoid

• Staying quiet about your plans. To reduce surprises and potential conflicts, be sure your intended fiduciaries know about your estate plan as you create and update your will.
• Honoring family hierarchy. Choose fiduciaries based on ability, not their place in the family. For example, just because a child is the eldest doesn’t mean they are suited for administrative tasks.
• Overlooking tangible property. To prevent disputes, specify which heirs should receive valuable or sentimental items.
• Forgetting to update beneficiaries. Assets like retirement accounts and life insurance policies don’t transfer through a will, so be sure to review their beneficiary designations to ensure that they match your wishes.
• Not granting enough authority. Your health care directive and durable power of attorney appointees should have full control over their respective duties. An estate attorney can help ensure this.
• Choosing only a primary fiduciary. Be sure to name a successor when selecting fiduciaries, just in case your primary appointee is unable to perform the task.