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WalletPrep worksheet · Protect yourself

Do I need a will?

Name ____________________ Date __________

Key ideas

  1. Without a will, state law decides. Each state has a set order, usually spouse, then children, then parents. An unmarried partner or a friend gets nothing.
  2. A will is how you name a guardian. If both parents die, a court appoints a guardian for minor children. Your will tells the court whom you chose.
  3. Some things skip the will. Life insurance, retirement accounts and jointly owned property go by beneficiary form or ownership, no matter what the will says.

Vocabulary

Executor
The person named in a will to settle an estate: file the will, pay debts and taxes, and hand out property.
Beneficiary
The person or group you name to receive an account, a trust or an insurance payout when you die.
Assets
Things you own that have money value, like cash, savings, retirement accounts, investments, a home or a car.
Intestate
Dying without a valid will. Your state's law then decides who inherits your property.
Probate
The court process that confirms a will, pays an estate's debts and hands out what is left to the heirs.
Power of attorney
A legal document that lets someone you choose, called an agent, make financial or health decisions for you.

Work it out

Rosa, 31, is a single mom with a 4-year-old. She lists what she owns to see which assets her will would control and which pass by beneficiary form.

  1. Car
  2. Checking
  3. Brokerage account, no TOD
  4. Belongings
  5. Controlled by the will
  6. 401(k)
  7. Term life policy
  8. Goes by beneficiary form

Check yourself

  1. Which of these does a will control?

    • A. A life insurance payout
    • B. A 401(k) with a named beneficiary
    • C. A car in your name alone
    • D. A home owned as joint tenants with right of survivorship

  2. Jamie owns a $6,000 car, $4,000 in checking and a $50,000 life policy naming her son. How much does her will control?

    • A. $10,000
    • B. $50,000
    • C. $56,000
    • D. $60,000

  3. What happens to minor children if both parents die without a will?

    • A. They automatically go to their grandparents
    • B. A court appoints a guardian under state law
    • C. The oldest sibling becomes guardian
    • D. The state raises them in foster care

Your turn

Write three names on paper: your executor, your guardian for any children, and a backup for each. Then list what you own in your name alone and check your state's signing rules before you draft the will.

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Answer key

Do I need a will?

Work it out

  1. Car$9,000
  2. Checking$3,000
  3. Brokerage account, no TOD$8,000
  4. Belongings$5,000
  5. Controlled by the will= $25,000
  6. 401(k)$30,000
  7. Term life policy$250,000
  8. Goes by beneficiary form= $280,000
  1. Her will controls $9,000 + $3,000 + $8,000 + $5,000 = $25,000. Her 401(k) and life policy, $30,000 + $250,000 = $280,000, follow their beneficiary forms.
  2. She names her sister as guardian and her brother as backup. The will leaves everything to her daughter, managed by her sister until her daughter is grown.
  3. Her 401(k) and policy name her daughter directly, so a court may have to manage that money. She asks a lawyer about naming a trust or custodian instead.

Check yourself

  1. C. A car in your name alone A will controls property in your name alone without a beneficiary. Insurance, retirement plans and survivorship property pass outside it.
  2. A. $10,000 $6,000 + $4,000 = $10,000. The $50,000 policy goes to her son by beneficiary form.
  3. B. A court appoints a guardian under state law Without a will naming a guardian, a court chooses one under state law, normally a close relative, who may not be the person you'd pick.