70% of us will spend a lifetime of working, accumulating an estate, and caring for a family and loved ones, and then leave the distribution of our property up to state law, which may not be in accordance with our wishes. Probably no other document in your lifetime is as important as your will – regardless of your age.
• Determine to whom, how, and when your assets will be distributed.
• Name an executor who will manage the estate in accordance with your intentions.
• Create trusts for your spouse, children, or others, thus providing income for beneficiaries as well as saving taxes.
• Reduce and sometimes eliminate estate taxes.
• Make gifts to charity: a charitable organization can never inherit from the estate of an individual who dies without a will.A will should not be made and forgotten. It needs to be reviewed periodically and revised.
Myth: “Only rich people need wills.”
Quite the contrary. In fact, the families of those who are not rich are most apt to be hurt by intestacy. As noted, most state laws provide, in the absence of a will, more adequately for children than for the surviving spouse. Plus, the facts show that many people are worth more than they realize—when they consider their life insurance, retirement benefits, home, savings, and securities.
Myth: “People without dependents do not need wills.”
Just the opposite. A person without dependents who does not have a will may find that under state law his or her property will go to his or her parents and perhaps brothers and sisters in specified, rigid shares. Friends, worthy charities, and other organizations the person may have wished to support will be left out.
Myth: “Younger people do not need wills.”
Wrong again. Every adult is likely to need a will, especially young married people with children. Accidents occur, and it is not uncommon for fatal accidents to involve both parents.
Myth: “All my property is in joint ownership—why do I need a will?”
While many of your assets may be jointly owned, it is unlikely that all your property is. In many cases retirement benefits, death benefits from your employer, income-tax refunds, etc. are individual assets. When assets are jointly owned, federal, and state gift-tax and estate-tax consequences need to be considered. The consequences of joint ownership also need to be considered if both tenants lose their life in a common accident.
Where Should I Start?
First make a list of all your property and its approximate value. Then decide to whom you want to leave your property and in what manner. The attorney who prepares your will might suggest that some part of your property be left in a trust. For example, your will could create a trust to provide income to your spouse for his or her lifetime with the property and then to go to your children. Trusts of this nature can often be used to save estate taxes. Your attorney can best advise you and show you how a gift made under your will to a charity such as the Northshore Schools Foundation saves taxes.
Who Should Be My Executor?
The executor named in your will has the responsibility of carrying out its directions. You can name a spouse, relative, or friend. Many people prefer to name a bank or trust company that is experienced in handling estates and managing the investment and distribution of property. One advantage of a bank is its permanence—an individual could predecease you.
What Does a Will Cost?
For a simple will, most lawyers would likely charge about $500. The cost normally will increase as the complexity of the document increases, but the professional involvement is well worth it. A will must meet the legal requirements of your state. If it does not, it could be invalid.
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