S&P's Financial Focus

Types of Wills

You are young, so writing a will seems like something that you don’t have to think about now. Wills are an important part of your financial planning, however. To be a smart money manager, you do need to consider having one. A will is a legal document that specifies how you want your property to be distributed after your death.

Make a Chart Here are the four basic types of wills to put on your chart:

Simple Will Usually used by people with small estates, a simple will leaves everything to the spouse. Everything left to the spouse will then be taxed as part of his or her estate.

Traditional Marital Share Will A spouse may leave one-half of the adjusted gross estate (the total value of the estate minus debts and costs) to the remaining spouse and the one-half of the estate to other heirs, such as children.

Exemption Trust Will A spouse may leave all his or her assets to the remaining spouse except for a specified amount that is put into a trust. This amount-up to $1.5 million-and any interest it earns is not taxed. The living spouse can draw an income from the amount.

Stated Dollar Amount Will A spouse leaves a specific dollar amount to the remaining spouse and stated amounts to other beneficiaries.

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