You hope to die after a long life, all your affairs in order. Unfortunately that’s not always what happens—and the result can be a mess for heirs. Ensure that your estate and loved ones are protected with a valid will. Discover why you need to have a will, how to craft one that serves you well and common mistakes to avoid.
Make a will? Even thinking about it may seem morbid or unnecessary, especially for fit, healthy adults, who often feel there’s plenty of time to put off planning for the inevitable. But, as daily headlines about highway crashes, airplane disasters and fatal accidents cruelly demonstrate, death can be premature, swift and completely unexpected. A simple will can prevent countless problems for your loved ones, says Jane W. Brown, an attorney with Gunster Yoakley in West Palm Beach, Florida.
If you die “intestate,” or without a will, your state’s laws—not you—will determine who ends up with everything. State intestacy laws vary, but generally, assets pass first to your spouse and children; if none, then to parents. If both parents are deceased, then the succession order usually is first to siblings, then to other living relatives and, barring any, to the state. (For details, check your state’s probate code.)
Unless you live in a state that allows registered domestic partners to inherit like spouses (California, Connecticut, Maine, New Jersey and Vermont), no one other than your family will inherit—including favorite charities, friends or a significant other. Intestacy laws provide virtually no exception. One sad September 11 case
involved a young man who was to be married within days to his longtime fiancée, but because he left no will, his estate went entirely to distant relatives; his fiancée
Brown stresses that the best time to make a will is when you are young and healthy and can think objectively, in the abstract, about your death and how you’d like to disperse your assets, rather than when you are ill, frail or distracted by health or family problems. But, she adds, it’s never too late.
A will puts you in control. It also helps protect your survivors from confusion (about your wishes), lawsuits, and anger and heartache at feeling you didn’t love them enough to plan for their futures, states attorney Colleen Barney, co-author of Best Intentions: Ensuring Your Estate Plan Delivers Both Wealth and Wisdom (Dearborn Trade Publishing 2002). If you have children, a will lets you determine who will raise them and manage their money. And, if you choose, a will can prevent family members you detest from getting a dime!
To be official, your will must meet specific state-determined criteria. In general, you (the “testator”) must be at least age 18, legally competent and acting voluntarily. The document must state that it is your will, and it must be dated and signed by you, as well as by at least two adults who witnessed your signature (three in Vermont). To avoid potential lawsuits, heirs should not be witnesses. In many states, if your will is also notarized, it helps simplify court procedures required to prove its validity after you die.
Wills should detail the following:
- names, locations and birth dates of your immediate family, including your spouse and all children, adopted ones included
- appointment of both a guardian and an alternate guardian for any minor children (Discuss with your attorney whether you should appoint a separate guardian to manage their finances.)
- a list of who should inherit specific assets (In some states, this is handled more informally with a separate list that can be frequently updated, which is kept with the will.)
- what will happen to any remaining property not specifically mentioned
- who your “executor” will be, i.e., the person responsible for carrying out the directions you leave in your will (e.g., distributing property and paying any debts and taxes)
Follow these steps recommended by legal experts:
Educate Yourself. Consult references to familiarize yourself with legal terms, and consider how you’d like to distribute your possessions. A guide such as The American Bar Association Guide to Wills and Estates (Random House 2004) can help you get started.
Be Sure Your Will Is Correctly Drawn. If you’re young and single with few assets, will-making software, such as Nolo’s Quicken Willmaker Plus (www.nolo.com), may be enough to guide you through the process of making a simple will. Be aware that if your will fails to follow state law, however, it will be invalid.
If you have children, if your estate is larger or if your family is complex or contentious, consult an attorney who specializes in trusts and estates. Getting legal advice assures, for example, that you don’t omit something important or use words or terms that have legal meanings different from what you intend. Depending on your location, a simple will can cost about $250, while more complicated estate plans, including a living trust, run $1,500 or more, says Brown. Ask people you know for references, or try the lawyer
locator at the American Bar Associa-
tion’s website (www.abanet.org) or the American College of Trust and Estates Counsel site (www.actec.org).
Include a Living Will and Health Components in Your Final Documents. Living wills let you specify how you want to be treated if you can’t make decisions about life-sustaining medical treatment (for example, will you want a feeding tube?), ensuring that you get the treatment you want, while sparing loved ones agonizing decisions. Additionally, you’ll generally need documents naming someone to make decisions for you and to handle financial issues for you if you are not capable (powers of attorney).
Keep Your Will in a Secure, but Accessible, Location. If you have a lawyer, the original documents are usually kept at his or her office. Also keep copies in a safe place that is easy to get at, such as a fireproof box or file cabinet with your other important papers.
Update Your Will as Needed. Avoid potential problems by updating whenever
- you marry or divorce;
- you give birth or adopt;
- you move to another state;
- a family member or other named beneficiary dies;
- you want to change the way property will be distributed;
- your net worth increases dramatically; or
- a designated executor, trustee or guardian is no longer able to fulfill that role, or you decide to make a change.
The worst mistake is not having a will. Here are some other common blunders:
Drafting Your Own Will. “There are all kinds of traps you can unwittingly fall into when drawing your own will,” says Brown. “For example, if you ‘leave everything to daughter, Susan’ and Susan predeceases you, your assets go to Susan’s descendants—[which] you may not want!” A simple will covering all legal issues is easily prepared by a trusts and estates lawyer for just a few hundred dollars, Brown advises.
Not Contemplating Worst-Case Scenarios. It’s awful to consider, but what if your designated heirs—say, your spouse and child—die at the same time or die shortly after you do? If you haven’t named alternate beneficiaries, your assets will be distributed according to state law—and your estate could go to people you didn’t anticipate (or didn’t want as heirs), like your in-laws or your child’s other parent, even if you’ve long been divorced, says Barney.
Naming the Same Person as Guardian and Trustee. The best guardian for your children might not also be financially savvy, says Brown. Additionally, having a separate guardian and trustee can put an important check-and-balance in place; it will be tougher for the guardian to run through your child’s money, for example, if he or she has to justify bigger expenditures to an outside party.
Leaving Everything to a Spouse. Don’t presume it’s best to leave 100% to Mary or John, attorneys caution. If your spouse remarries and then dies, your entire estate could end up belonging to husband/wife #2. Instead, you may want to protect some assets for children or other family members, says Barney.
Failing to Update. Family, possessions and wealth usually change over time. Congress, the courts and the IRS constantly alter tax laws. Your decades-old original will may not accurately reflect your current wishes. All experts advise making sure your will is reviewed after every major life change and interstate move.
Not Telling Your Heirs Where to Find Your Will. Frantically searching for Dad’s last will and testament creates a great Perry Mason plot, but a horror story in real life. Make accessing your will easy. Don’t simply entrust everything to your executor, since this person might not be available when the time comes, and don’t “safeguard” the only copy in a safe deposit box, which might be sealed upon your death. Do keep a copy of your will where people would logically look for it, while leaving the original with your attorney.