If you’re young or are just starting your entrepreneurial journey, there’s likely one aspect of your life that hasn’t been given a lot of attention. What am I talking about? Wills, of course.
Wills, and quite frankly, the entire estate planning process, are typically neglected or downright avoided. You may say — David, I don’t have any children or a spouse to pass assets down to. But wills are not solely for those who have millions of dollars or want to join the Giving Pledge. They’re for anyone who wants to simplify the distribution of their assets upon death. If you want to make life miserable for the people who have to deal with your remaining things, feel free to skip this newsletter.
For those of you sticking around, let’s dive in.
What is a will?
A will is a legally enforceable document that details how you want your assets and property distributed when you die. Think of it as a clear set of instructions that simplifies the process for everyone left behind. A lack of clear instructions can leave those you care about with headaches, and even worse, possible infighting over your assets.
Within the will, you designate an executor — the person responsible for carrying out your wishes and making sure everyone receives what they are supposed to. The people receiving assets are known as beneficiaries. A will is considered a revocable document, meaning it can be changed at any time while you are alive. Also, it does not take effect until your death.
If you have minor children, you can also use your will to designate a guardian — someone you trust to care for them if something happens to you.
What happens if you die without a will?
Dying without a will is called dying intestate. In that case, the state where you legally reside decides how your assets are distributed — not you. States have their own rules, but assets generally go to a spouse first, then children, then other family members. If you are unmarried with no children, the state determines who receives your assets based on a legal formula that may have nothing to do with your actual wishes.
For founders specifically, this creates a particularly serious problem. Your business interest is an asset — and without clear instructions, what happens to it depends entirely on your business structure and state law. A sole proprietorship dissolves entirely upon the owner’s death. An LLC or partnership may be thrown into chaos if the operating agreement does not address the death of an owner. For example, business debts do not disappear, partners may be left with no legal authority to act, and employees lose direction. You get the idea.
Approximately two-thirds of family-owned businesses do not have a formal succession strategy in place. Most founders think about their personal assets — the house, the bank accounts, the personal property — but rarely stop to think about what happens to the business itself. A will is a starting point, but it needs to account for the business, as well.
Understanding probate
One of the most common misconceptions about wills is that having one means your estate avoids probate. It does not.
A will still goes through probate — the court process of validating the will, appointing the executor, identifying debts, paying them off, and then distributing assets. It is a public process that can take months or even years, depending on the complexity of the estate. Probate expenses can cost between 3% and 7% of an estate’s total value.
What a will does is make probate more orderly. It gives the court clear instructions. Without one, the court still goes through the same process — but it will distribute your assets according to state law, which can take longer and cost more.
The primary ways to avoid probate are through non-probate assets — trusts, joint tenancy, and TOD and POD designations. A will does not eliminate probate, but it provides the court with a clear roadmap for how the assets should be distributed.
Non-probate assets — what a will does not cover
Not all assets are governed by a will. Non-probate assets — those that are jointly owned or already have a designated beneficiary — pass directly to the beneficiary at the time of death without going through the will at all. Examples include investment accounts with a Transfer on Death or Pay on Death designation, jointly held bank accounts, real estate held as joint tenants with right of survivorship, and retirement accounts and life insurance policies with named beneficiaries.
For many people with relatively simple estates, beneficiary designations alone can handle the majority of their assets. If your investment accounts, retirement accounts, and bank accounts all have designated beneficiaries, a significant portion of your estate may transfer automatically without the need for a will at all.
Assets governed by a will include anything that does not have joint tenancy or a beneficiary designation already in place — certain property, personal belongings, business interests, and financial accounts without designations.
Types of wills
A simple will names an executor and identifies who receives your assets. It is typically used by those with straightforward estates — a single person, a few assets, no complex business interests.
A testamentary trust is a trust created within a will. It establishes a trustee to manage and distribute assets according to specific instructions, and is often used when leaving assets to minor children or individuals who may not be equipped to manage a large inheritance.
A living will is an entirely separate document from your last will and testament. It outlines your preferences for medical treatment if you become incapacitated and cannot make decisions for yourself. It takes effect while you are alive but unable to act for yourself, not at death.
A joint will is executed by two people — typically spouses — and merges their wishes into a single document. Once the first person dies, it becomes irrevocable, binding the surviving spouse to its contents. It offers less flexibility than two separate wills and is worth understanding before choosing this option.
So who actually needs a will?
When I think about my personal situation, I do not currently have a will, though it is something I have been thinking about. My estate is fairly simple, and I have named beneficiaries on most of my investment accounts and financial assets, which means a significant portion of what I own would transfer automatically without needing a will. But there is one area that needs to be addressed — my rental property. A Transfer on Death deed works similarly to naming a beneficiary on an investment account — both transfer assets directly to a named beneficiary outside of probate. Point being, this is an area that I need to address.
The need for a will is less about how much money you have and more about the complexity of your situation and how much you care about where specific things end up. If you are very clear about who should receive your assets and most of those assets already have beneficiary designations, you may have less urgency. However, if you have assets that cannot easily be assigned to beneficiaries (e.g., art, cars, jewelry, etc.), a will is a good choice to designate the beneficiaries formally.
The good news is that basic wills do not have to be expensive. Online services like Trust & Will and LegalZoom allow you to put together a simple will for a relatively modest cost. If your estate is more complex — business interests, significant assets, or specific instructions that require legal precision — working with an estate planning attorney is advisable.
Whatever your situation, it is worth taking stock of your assets and determining whether beneficiaries need to be named or further steps — such as drafting a will — need to be taken.
*This is not meant to be legal or tax advice and is for general information purposes only.
Did you know?
Only 24% of Americans have a will in 2025 — down from 33% in 2022.
Something to ponder…
Is your estate as simple as you think? If not, it may be time for a plan.
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