If you already pay into a pension from your employer, you may feel that a will is unnecessary. The pension will provide money for your family even if you are not earning. You should know, however, that a will can help your family in different ways.
Saving Time and Expense in Distributing Your Estate
In short, a will explains who you want to receive which of your assets when your estate is distributed after you pass away. A pension, in contrast, does not distribute any assets besides the money that you and your employer put into the plan while you worked. You may have many different kinds of assets, such as a house, a car, stocks, bonds, cash, and other valuables.
Without a legal document explaining how you want the asset distribution performed, the court or family members will have to follow the order of intestate succession. This order favors spouse and children, with other family members inheriting only if you aren’t married, don’t have children, or some of them have passed away. Not only is intestate succession sometimes inequitable, it also does not necessarily reflect your wishes. Making a will can save your family the time and expense of going to court and the stress of figuring out who inherits what.
A Pension Is Never Guaranteed
Although people may think that they will receive their pensions as long as they work hard, the truth is quite different. Unfortunately, pension providers can deny payments for many reasons, including:
- Not enough years of service to the company
- A break in employment
- Early retirement
- Not meeting other pension “vesting” criteria
You may want to check with your employee benefits coordinator to verify that you are on track to receive the pension. Regardless, doing some additional estate planning to settle your affairs along with the expected pension payment is a good idea.
Making a will to distribute your estate is often the first step. You may want to invest in life insurance, form a trust, or designate relatives as beneficiaries of your 401(k) or IRA. There are many estate planning options available to give you peace of mind, even if you have a pension already.
Want to start estate planning today? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.