Making a will seems morbid, but it is an important tool to protect your dependents or relatives after your death. In most cases, people talk about the assets or monies that will be bequeathed in a will, but passing on debt to dependents or relatives has become more and more common instead. This is where making a will be most important.
Whether you die of old age or die unexpectedly, there are many things to deal with and much paperwork to complete. Whom do you want those duties to fall on? How will you assets be divided up? How will your debts be paid off? These are all important questions.
If you die without a will, the government or court will decide how your money, property or possessions will be allocated, including your debts. Without a will, you may unnecessarily burden your family or dependents with your debts. If you die unexpectedly, it may be your ageing parents or spouse that will end up having to service any debts you may have left unpaid.
In your will, you have to appoint a legal representative or an executor that will be in charge of settling your estate. It is also important that you stipulate what assets should be used or sold to settle any outstanding bills. For example, if you do not want your home sold to settle your mortgage, then you need to make other arrangements to cover the cost of your mortgage. The more detail you can give in your will, the better off your family or dependents will be when you die.
The executor is in charge of settling all taxes and debts for the deceased. If the assets are not enough to pay off all the outstanding debts, then the executor will make a decision as to how the debt will be repaid. If you do not want to saddle your dependents or relatives with your debt, then it makes sense to take out life insurance or invest in other vehicles that will pay out upon your death.