Everyone should make a will, especially if you have assets you want to pass on to your family.
Yet, most Americans have not written a will or estate plan. This can be problematic, as a person’s assets will be divided in Probate Court to respond to creditors, tax collectors, funeral expenses and the transfer of property, making it an expensive process.
A will is a less onerous and inexpensive alternative because this legal document clearly identifies the people and/or charities you want to receive your property and other possessions. But once you’ve made the decision to execute a will, there are some things to consider.
What you should know
While many websites offer do-it-yourself software tools, these programs often fail to address the inherent complexities of this legal document. “All states have a standardized code called the statute of wills that can treat wills differently,” attorney at law and owner of Daniel Quick PLLC explained. “If not witnessed and notarized properly in compliance with the statute, the document will be declared invalid. With wills, the execution is even more important than the substance.”
The attorney noted a common mistake in executing a will. “I was involved in a case where the testator (the person who makes a will) had wanted all of his real property to go to one son but had written ‘personal property’ in the will instead, not knowing the difference between the two,” he says. Personal property is movable property, such as an automobile; real property is immovable property like land. Once the will is executed, he says, it’s very difficult to challenge it after the fact.
When in doubt, get a lawyer
Unless you’re an experienced attorney or a paralegal, consider speaking to a lawyer when executing and writing a will. Bring a complete inventory of your assets, such as retirement funds and other investments, as well as bank account and credit card statements.
Include information on real and personal property, such as a list of fine art holdings and automobiles, and the remaining mortgage payments and accrued value of the residential home and other real estate assets. Bear in mind that joint ownership of real property, such as two spouses owning a house, falls outside a will because these assets are generally passed on to the surviving owner.
Deciding who gets what
For many people, the most difficult part of executing a will is determining who will get what and how much of it. Three children would typically receive equal shares of the estate, but if one of the children has special needs, a different distribution may be needed. Similar considerations may arise with grandchildren and stepchildren.
Other legal issues involve the creation of a trust to achieve tax benefits and the development of a living will. Different from a last will and testament, a living will is a written statement often attached to the last will that details the desired medical treatments (if any) in the event the person is incapacitated and unable to express informed consent. Many wills also include an attachment directing how to treat the person’s remains, such as burial or cremation.
Choosing an executor
The choice of an executor to carry out the terms of the will is another important consideration. Many testators typically choose a spouse or a child to assume this responsibility. These duties should not be taken lightly. Executors are accountable for paying bills and taxes on the estate, making needed court appearances and maintaining the property until the estate is settled. If the estate is complicated, the executor may want to consider hiring an attorney to sift through potential issues.
Once a will is executed, it is not set in stone. “People’s lives change. They get divorced, remarry, have more children and stepchildren and enlarge their assets,” says Quick. “In many cases, if the initial will is executed properly, these life changes can be addressed through a simple codicil rather than writing a whole new will.”
The easiest way to avoid issues for your loved ones during a difficult time is to create a last will and testament – and to keep it updated as life changes. Another way you can prepare your family for the worst is with a life insurance policy. Find out about the different life insurance coverage option today.