You might tune in for some recent information about this important topic that was presented on our radio show. Recently Deborah Jacobs joined Paul Petillo on Financial Impact Factor radio to discuss estate planning.
There are other reasons to create a will above and beyond the simple financial
benefits of having one. Although I will get to those in a minute, I want
to first discuss some of the more psychological reasons to having this
important legal document and why you should do it now.
The late George Carlin, the irreverent comedian once said, "we buy a house and
fill it with stuff. When we have too much stuff, we move to a bigger house."
But to many of us, that stuff has value beyond the financial and those
possessions, no matter how mundane or ordinary, do carry a certain value
that may not be monetary. A will can, as they are fond of saying, provide
peace of mind for the one writing the will and greatly help your loved ones.
As a legal document, a will can designate how those possessions are
divided and to whom. These details should be discussed openly with spouses
and recipients of these inheritances. While there are personal bridges to
cross when writing this document - the most important, dealing with your
own and eventual mortality - they can also be very helpful to those that
survive your passing.
The first step is naming or finding an executor. This person, whether it be a
relative or close friend, should be aware of their responsibility and be
able to carry out your wishes in a difficult time. This person will deal
with often fractured families and grieving survivors. Having someone
level-headed and comfortable with their responsibilities will make it
easier for everyone concerned,.
This person should be made aware in advance of the appointment and any
instructions should be put in writing. While this is not necessary, it is
often easier for the executor to execute your wishes if they have some sort
of reference document. The key is to create this appointment while you are
still in good health and able to think things through. Most importantly, be specific.
For parents of young children, this might also be the person(s) you want
to raise your offspring, provide for them the way you would, and perhaps
give them the same set of values that you have. For people who have grown
children, the executor should be someone close and generally amiable to
other family members. You would be surprised at the reactions of those close to you, many of whom may feel slighted or misinterpret your wishes. Either way, the executor should be a strong willed person who is able to follow your requests and deal with the financial underpinnings of your estate.
Discussing these things with your children, especially if you are older,
becomes incredibly important. Most folks find the conversation
awkward and difficult. It means coming to grips with your own mortality as
well as forcing your children to understand that your death is inevitable.
This becomes doubly important when only one parent is writing the will.
If you are an only child, suggest (strongly) that their house be placed in
a trust. This will allow the house to pass into your name without the
usual wait for probate. Probate is essentially the legal proceeding that
divides the property based on the presence of the will. If there is no
will, the probate judge will need to follow the law of the state, sometimes
tying assets up for months awhile creditors are contacted and the estate is
settled. But that is worse case scenario.
In many cases, the cost of simple trust and lawyer's fees involved are
a small fraction of the costs of probate, which in many states can amount
to 3-5% of the home's worth.
There are a staggering amount of folks that currently are without a
will. According to a survey that was conducted by FindLaw.com, 57%
of households with something to lose should a death occur, have no will or
directions for their heirs.
A will, although a wonderful document, often does not give all of the
financial details of a person's life. The executor or the children should
also know where all of the bank statements, tax returns, investments and
insurance policies as well as any other pertinent financial documents.
The best thing you can do is to create a list of assets, directions on
how you want your worldly goods divided, and even more importantly, how you
want your medical procedures to be handled in the case of complete
incapacitation.
But don't wait. If you have property or someone who depends on you, find an attorney and make a will today.
