Your Last Will and Testament is perhaps the most affordable—and most important—legal document you will ever obtain. Your Will determines (among other things) who inherits your estate, who administers your estate, who takes care of your children, who takes care of their property, and even who cares for your pets. Without a properly drafted and executed will, the Court is powerless to enforce your last wishes. You risk leaving your loved ones in a very difficult position regarding your estate and children at a very difficult time.
This post will offer some simple answers to common questions regarding estate planning and its benefits.
Do I need a will?
To answer this question, it is important to understand the consequences of not having a will. First, you don’t get to decide who gets what. Without a will, your estate (generally speaking) will go to those who are legally closest to you: your spouse, your children, your parents, and/or your extended family, depending upon who survives you. This may be all well and good, but recognize that the law does not account for broken relationships, and it does not provide for gifts to friends, non-marital significant others, charities, churches, and other people or entities that may be close to you.
Second, courts will have to determine who will care for your minor children. Court proceedings can quickly turn into nightmare custody battles, which are arduous on children and permanently destroy families.
Third, passing without a will may leave any minor children with substantial property or money. If a trust or other appropriate vehicle has not been arranged, a guardianship will be required. These are expensive and result in money that should go to your children being wasted on the administration.
Fourth, the Courts will have to decide who administers your estate. Again, this can lead to needless legal battles amongst your survivors.
Finally, depending upon the value of your estate, there may be tax considerations. Proper estate planning can minimize Uncle Sam’s take to the benefit of your loved ones.
The best way to avoid all of these scenarios is to have a will. It is also a good way to make things easier on your loved ones after your passing.
What about my bank accounts, life insurance policy, and retirement funds?
Typically this property does not pass under a will. Most bank accounts provide for a payable on death declaration. Similarly, life insurance policies pass directly to the named beneficiary. It is important to keep this information up to date.
I have a will, but it’s pretty old. Do I need a new one?
It’s a good idea to contact your estate planner anytime you undergo a significant life change, such as acquiring children by birth or adoption, getting married or divorced, undergoing another significant relationship status change, or undergoing a significant financial status change. Obviously, contact your estate planner if you have specific provisions in your will that you know you want changed.
Where do I keep my will?
Somewhere safe. A safe deposit box at a bank is ideal. Also, it is important that any named executors in your will and any other beneficiaries under the will know that you have a will and know where you keep it.
What is a power of attorney?
A power of attorney is a document offered by many estate planners, which allows a trusted person to manage your financial affairs for you in the event you become incapacitated.
What is a medical power of attorney?
A medical power of attorney is a document offered by many estate planners that allows a trusted person to make medical decisions for you in the event you become incapacitated.
What are advance directives?
Advance directives (or a living will) allow you to determine how you would like to be cared for in extreme situations where you require extensive life support measures. If you would prefer to go in peace, this document can help ensure that will happen. Think Terri Schiavo.
What can I do to control the disposition of my remains?
The disposition of your remains can be provided for in your will; however, perhaps the best method is to utilize the statutory form appointing an agent to be in charge of the disposition of your remains. This legal appointment may include special instructions to your agent, such as where you would like to be buried, where you would like your ashes scattered, or to which facility you would like to make an anatomical gift.
