Demystifying Your Legacy: A Comprehensive Guide to TurboTax Will Builder
Have you ever thought about what would happen to your assets, your loved ones, or even your beloved pet if you were no longer around? It's a tough thought, I know, but it's a crucial one. Many people put off creating a will, seeing it as a complex, expensive, or even morbid task. But what if I told you there's an accessible, user-friendly, and relatively affordable way to start securing your legacy right now?
That's where TurboTax Will Builder comes into play. Often known for its tax preparation software, TurboTax (through a partnership with ARAG) also offers a service to help you draft your last will and testament. But how effective is it? Is it right for you? This lengthy post will walk you through everything you need to know, from its features to a step-by-step guide, and even answer some common FAQs.
Understanding the Landscape: Why Consider an Online Will Builder?
Before we dive into the specifics of TurboTax Will Builder, let's understand why online will builders have become so popular. Traditionally, creating a will involved hiring an attorney, which can be a significant expense. Online platforms offer a more budget-friendly and convenient alternative for many.
Pros of Online Will Builders:
Cost-Effective: Generally much cheaper than hiring a lawyer.
Convenience: You can create your will from the comfort of your home, on your own schedule.
Speed: For simple estates, a will can be drafted in a matter of minutes or hours.
Accessibility: Lowers the barrier to entry for estate planning, encouraging more people to have a will.
Cons of Online Will Builders:
Complexity Limitations: May not be suitable for complex estates, intricate family situations, or those with significant business holdings.
Lack of Personalized Advice: No direct legal counsel to address unique circumstances or offer tailored strategies.
State-Specific Nuances: While most online builders aim for state compliance, a lawyer is best equipped to navigate all the local intricacies.
No "What If" Scenarios: An attorney can help you think through potential future scenarios and plan for them, which online tools might not adequately cover.
Now, let's focus on how TurboTax's offering fits into this picture.
Step 1: Is TurboTax Will Builder Right for You?
This is the most critical first step! Don't just jump in. TurboTax Will Builder is generally well-suited for individuals or couples with relatively simple estate planning needs. This often includes:
Individuals with straightforward assets: A home, bank accounts, investments, personal property.
Parents needing to name guardians for minor children.
Those who want to designate beneficiaries for their assets.
People with no complex business interests or highly unusual distribution wishes.
Who might need a traditional attorney instead?
Individuals with significant wealth or complex assets: Such as multiple properties, international assets, or extensive business ownership.
Families with complex dynamics: Blended families, children with special needs, or potential family disputes.
Those with charitable giving aspirations that require specific trust structures.
Anyone seeking advanced estate planning strategies: Such as various types of trusts (beyond a simple testamentary trust), tax minimization strategies, or probate avoidance techniques.
Individuals who anticipate potential challenges to their will.
Consider your comfort level: If you feel confident understanding legal terms and navigating the process on your own, an online builder could be a good fit. If you prefer hand-holding, extensive legal advice, and a completely customized approach, a lawyer is likely a better choice.
Step 2: Understanding TurboTax Will Builder's Features and Cost
TurboTax Will Builder is offered in partnership with ARAG. This isn't a standalone TurboTax product in the same way their tax software is, but rather an add-on or a feature they offer through this collaboration.
2.1 What Documents Can You Create?
Typically, TurboTax Will Builder allows you to create:
Last Will and Testament: This is the core document, outlining how your assets will be distributed and who will be your executor (the person who manages your estate).
Living Will (Advance Healthcare Directive): This document expresses your wishes regarding medical treatment if you become incapacitated and can't make decisions for yourself.
Durable Power of Attorney for Healthcare: This designates someone to make healthcare decisions on your behalf if you're unable to.
Durable Power of Attorney for Finances: This appoints someone to manage your financial affairs if you become incapacitated.
It's important to note that while these documents cover fundamental estate planning needs, they may not include more advanced instruments like various types of trusts (e.g., irrevocable trusts, special needs trusts) that might be crucial for larger or more complex estates.
2.2 Pricing Structure
The pricing for TurboTax Will Builder is usually a one-time fee, often around $39 to $49. It's important to confirm the current pricing directly on the TurboTax website or within their platform, as it can be subject to change.
Key Considerations Regarding Cost:
Add-on vs. Standalone: This feature is typically presented as an add-on within the TurboTax ecosystem, often during the tax filing process or as a separate purchase.
Access Duration: When you purchase the Will Builder feature, you typically gain access to it for a specific period (e.g., one year). This allows you to create, edit, and print your documents during that time.
State-Specific Templates: The service utilizes state-specific templates developed by attorneys, which is a significant advantage for ensuring legal compliance.
Step 3: The Step-by-Step Process of Using TurboTax Will Builder
Once you've decided that TurboTax Will Builder aligns with your needs, the process is designed to be straightforward and guided. While the exact interface might vary slightly, the general steps are as follows:
3.1 Accessing the Will Builder
Through TurboTax Account: If you're an existing TurboTax user, you might find the Will Builder offered as an additional service within your account dashboard or during the tax filing process. Look for "Estate Planning" or "Will Builder" options.
Direct Purchase: You may also be able to purchase access to the Will Builder directly from the TurboTax website, separate from your tax filing.
3.2 Initial Information Gathering
Welcome and Introduction: The system will likely start with a brief introduction to what you'll be creating and the information you'll need.
Personal Details: You'll be prompted to enter your basic personal information, such as your full legal name, address, marital status, and citizenship.
Family Information: This includes details about your spouse (if applicable), children (including minor children), and potentially other dependents. Be prepared to provide their full names and dates of birth.
3.3 Designating Your Beneficiaries and Assets
Identifying Your Assets: This is a crucial step. You'll need to list your significant assets. Think broadly here:
Real Estate: Your home, any other properties you own.
Bank Accounts: Checking, savings, money market accounts.
Investment Accounts: Brokerage accounts, mutual funds, stocks, bonds.
Retirement Accounts: 401(k)s, IRAs (though these often have their own beneficiaries designated outside of a will, it's good to list them for a complete picture).
Personal Property: Jewelry, art, vehicles, collectibles, etc.
Digital Assets: While less common for simple wills, consider if you have digital assets you want to address.
Naming Beneficiaries: For each asset or for your residuary estate (everything not specifically given away), you'll name who you want to receive it.
Primary Beneficiaries: The first people or entities you want to inherit.
Contingent Beneficiaries: Who inherits if your primary beneficiaries predecease you or cannot inherit for any other reason. This is an extremely important step to prevent your assets from going through probate without your explicit instructions.
Specific Bequests: This is where you can specify particular items to go to particular people. For example, "I give my vintage watch collection to my nephew, Rahul."
3.4 Appointing Key Roles
Executor (Personal Representative): You'll name the individual or institution responsible for carrying out the terms of your will, settling your debts, and distributing your assets.
Primary Executor: The first choice.
Alternate Executor: A backup in case the primary executor is unable or unwilling to serve.
Choose wisely! This person will have significant responsibility.
Guardians for Minor Children (if applicable): If you have minor children, this is arguably one of the most critical aspects of your will. You'll name the person(s) you wish to raise your children if both parents are deceased.
Primary Guardian: Your first choice.
Alternate Guardian: A backup.
Discuss this with your chosen guardians beforehand! It's a significant responsibility.
Trustee for Minor Children's Inheritance (if applicable): If you leave assets to minor children, you can establish a testamentary trust within your will. This means a trustee will manage those assets for the children until they reach a certain age. The Will Builder may guide you through setting up a simple trust for this purpose.
3.5 Healthcare Directives and Power of Attorney
Living Will/Advance Healthcare Directive: You'll answer questions about your preferences for medical treatment, such as life support, pain management, and organ donation, if you become terminally ill or incapacitated.
Power of Attorney: You'll name individuals to act as your agents for financial and/or healthcare matters if you're unable to. This is distinct from your will, as it takes effect during your lifetime if you become incapacitated.
3.6 Review and Finalization
Review Your Document: The system will generate a draft of your will and other documents. Read every word carefully! Ensure all names are spelled correctly, addresses are accurate, and your wishes are clearly expressed.
Make Revisions: Most online will builders allow you to go back and edit your answers if you spot any errors or want to make changes.
Printing and Execution: This is the absolute most important step. An online will is just a digital document until it is properly executed according to your state's laws. The Will Builder will provide instructions, which typically involve:
Printing the document.
Signing it in the presence of witnesses.
Having the witnesses also sign.
In some states, notarization might be required or recommended.
Do NOT skip these execution steps! An improperly executed will is invalid.
Step 4: What Happens After You Create Your Will?
Creating your will isn't the finish line; it's just the start of responsible estate planning.
4.1 Storing Your Will
Safe but Accessible: Keep your original signed will in a secure but accessible location. A fireproof safe at home, a safe deposit box (though this can sometimes complicate access for your executor), or with your attorney are common options.
Inform Your Executor: Make sure your executor knows where your will is stored and how to access it. Provide them with a copy of the executed will (not the original).
4.2 Communicating with Loved Ones
Discuss Your Wishes: While you don't need to share every detail, consider having a conversation with your executor and primary beneficiaries about your wishes and where they can find important documents. This can significantly ease the burden on them during a difficult time.
4.3 Regular Review and Updates
Life Changes Mean Will Changes: Your will is not a "set it and forget it" document. Life happens! Review your will periodically, ideally every 3-5 years, or whenever a significant life event occurs, such as:
Marriage or divorce
Birth or adoption of a child
Death of a beneficiary or executor
Significant change in assets (e.g., buying a new home, inheriting money)
Moving to a different state (state laws regarding wills can vary significantly)
Amending Your Will: If changes are minor, you might be able to create a codicil (an amendment) to your existing will. For more substantial changes, it's often better to create an entirely new will and properly revoke the old one. TurboTax Will Builder's access period typically allows for edits and reprinting within that timeframe.
Pros and Cons of TurboTax Will Builder
Let's summarize the advantages and disadvantages of using TurboTax Will Builder specifically:
Pros:
User-Friendly Interface: TurboTax is known for its intuitive, interview-style format, which generally translates well to its Will Builder, making the process easy to follow.
Cost-Effective Solution: It's a much more affordable option compared to hiring a lawyer for basic estate planning documents.
State-Specific Templates: The partnership with ARAG provides access to attorney-developed, state-specific legal templates, which is crucial for validity.
Convenience: Complete your will from home, at your own pace.
Multiple Documents: Beyond just a will, it typically helps you create living wills and powers of attorney, offering a foundational estate planning package.
Cons:
Limited Complexity Handling: Not suitable for complex estates, intricate family situations, or advanced estate planning strategies.
No Legal Advice: The platform cannot provide personalized legal advice. If you have questions about specific scenarios or legal implications, you'll need to consult an attorney independently.
Execution Responsibility: The user is solely responsible for correctly printing, signing, and witnessing the documents according to state law. Errors here can invalidate the will.
Upselling Concerns: As with many TurboTax products, some users report feeling steered towards additional paid features, though this is less common with the Will Builder specifically.
Access Duration: The access to edit and print documents is usually for a limited time (e.g., one year).
10 Related FAQ Questions
Here are some frequently asked questions about online will builders and TurboTax Will Builder, structured to start with "How to":
How to ensure my TurboTax Will Builder will is legally binding?
Your will created with TurboTax Will Builder is legally binding only if you properly execute it according to your state's laws. This almost always means printing the document, signing it in front of the required number of witnesses (usually two), and having those witnesses sign it as well. Some states may also require notarization. The platform will provide specific instructions for your state.
How to choose an executor for my will?
Choose someone you trust implicitly, who is organized, financially responsible, and capable of handling legal and financial matters after your passing. They should be willing to take on the role and understand the responsibilities involved. It's often best to name both a primary and an alternate executor.
How to name guardians for my minor children in my will?
TurboTax Will Builder will prompt you to name a primary guardian and an alternate guardian for any minor children you have. It's crucial to discuss this decision with the individuals you choose beforehand to ensure they are willing and able to take on this responsibility.
How to include specific gifts or bequests in my will?
The Will Builder will typically have sections where you can specify individual items (e.g., a piece of jewelry, a car) or specific sums of money to particular individuals or charities. For everything else, you'll usually designate a "residuary beneficiary" for the remainder of your estate.
How to update my will if my circumstances change?
You can update your will created with TurboTax Will Builder within the access period you purchased. Simply log back into the platform, make the necessary edits to your information, and then print and re-execute the updated document with new signatures and witnesses. Always destroy all copies of your old, revoked will.
How to handle digital assets in my will?
While TurboTax Will Builder might not have an extensive section for digital assets, you can often include a general clause directing your executor to access and manage your digital accounts (e.g., social media, online banking, email). For more detailed instructions, consider creating a separate "Letter of Instruction" for your executor that isn't legally binding but provides guidance.
How to decide between an online will builder and a lawyer?
Use an online will builder like TurboTax Will Builder if you have a simple estate, clear wishes, and are comfortable with a DIY approach. Consult a lawyer if you have a complex estate, anticipate family disputes, have children with special needs, own a business, or require advanced estate planning strategies (like complex trusts or tax planning).
How to ensure my power of attorney documents are valid?
Similar to a will, your Power of Attorney documents must be properly signed and witnessed according to your state's laws to be valid. The TurboTax Will Builder will guide you on the execution requirements for these documents.
How to make sure my assets are distributed as I intend?
Be as clear and specific as possible when listing assets and naming beneficiaries in the Will Builder. Avoid vague language. For example, instead of "all my possessions," specify "my real estate at [address], my bank account ending in [last four digits], etc." This reduces ambiguity.
How to store my completed will and other estate planning documents?
Keep your original, signed will in a secure, fireproof, and easily accessible location (e.g., a home safe, a secure file cabinet). Inform your executor of its location and provide them with a copy. For other important documents like deeds, titles, and insurance policies, organize them so your executor can find them easily. Avoid safe deposit boxes as the only place for your original will, as they can sometimes be difficult for an executor to access immediately after your death.
