The Importance of an Up-to-Date Will

It's unfortunate but true: the fact is that about seven of every ten adults have life insurance, but only one-third have wills. Possibly the most reasonable explanation for this lack of forward planning is that insurance is actively sold while wills are not. Since lawyers generally don't aggressively push this facet of their services nearly as much as other areas, the responsibility for motivating yourself to provide a secure financial future for your family therefore falls squarely upon you. Consider the possible consequences if you shirk the duty and instead decide to do nothing:

  • There'll be no will to let others know what you wish to have done. Should you die without a will, your heirs' inheritances will be determined under state laws of intestacy (dying without a will), which may not match your own thoughts of who should get what. In most states, your assets would normally be apportioned to your spouse and children, often with half to two-thirds going to the kids.
  • The IRS will indeed make their presence known. Even if you prepare a will, your estate may not escape taxation. By incorporating proper estate-planning tools, however, a married couple can significantly reduce – if not completely eliminate – the effects of the Tax Man's siphon on their estate assets.
  • Your children could ultimately end up "paying the price." A solid plan will protect and preserve the property and other assets that you leave to your children and other heirs. You can also spare your heirs the inconvenience of probate, the legal process in which your will is proved valid and your assets are inventoried and disbursed by the court.

To accomplish all of this, it's wise to seek the help of an attorney with considerable experience in estate planning. To find a good one, get recommendations from friends, relatives, your accountant or financial planner, or contact your area's bar association and ask for the telephone number or website of the local estate planning council.

Many people never get around to writing a will for fear of confronting their own mortality. Others assume that they don't need one if they own all of their assets jointly. But their survivors ultimately come to the realization that joint ownership is not an effective substitute for a well-drafted will. And the peace of mind that it provides can generally be had at a modest price.

As an example, let's assume that an elderly widow adds her son's name to her bank account, making him joint owner of the balance with her, for the express purpose of allowing him to deposit checks for her. She may tell him to divide the money equally with his brothers and sisters after she's gone, but suppose he doesn't comply with her wishes and decides to keep the cash for himself. What could be done? His siblings might take him to court, but litigation can be time-consuming and quite costly, and it may not be worthwhile unless there's a large amount of money at stake.

Furthermore, married couples should neither rely solely on joint ownership. If a childless couple were involved in an accident in which the husband was killed but the wife survived for only one more day, the husband's half of the couple's joint property would automatically pass to the wife. But then upon her passing, all of the couple's assets would go to the wife's relatives, leaving the husband's family with nothing. Couples with minor children also need wills, despite the fact that their jointly held property will go to their children under state laws of intestacy if they die together. A will serves the purpose of nominating guardians to care for the offspring and manage their inheritances. If you don't name caretakers for your children, a probate judge will appoint guardians of his or her own choosing for the children and their assets. Additionally, a will is also used to nominate the executor of your estate.

If you already have a will, it's important that you examine it periodically to ensure that it still accurately reflects your wishes. Most people seldom bother to review their wills at all, passing up the chance to make any necessary changes. You should review your will (with your attorney) every three years or so, but examine it sooner if any circumstances have changed significantly – such as if you've grown much richer or suffered a serious financial setback. A review should also be done after the birth of a child or the death of a spouse or other beneficiary. And an examination may be in order after certain tax law changes. Furthermore, bear in mind that your will may be partially invalidated if you marry or divorce after writing it. If you move to another state, have a local lawyer check your will to make certain that it complies with your new home state's statutes. He or she can also determine if you've done all that you can to diminish the effects of the new state's death taxes.

You needn't tear up your old will and create a new one in order to make minor changes. For example, you can add or remove a beneficiary, change the amount of someone's bequest or replace an executor or guardian by asking your attorney to draft an amendment to your will, known as a codicil. In the same manner as wills, codicils must be signed and witnessed. After you've added two or three codicils, however, it might be wise to draw up a complete new will in order to avoid possible confusion. But whatever you do, don't alter the original copy of your will yourself. If you do, its validity can come into question – meaning, quite simply, probate.

Finally, it's not a good idea to store the original copy of your will in a safe-deposit box; banks in many states will seal a deceased's boxes until a court orders them opened. If you include burial instructions in your will, your survivors may not get to read them before your funeral. It's better to leave the original copy of your will with your lawyer, who may store it in his or her office, or with other wills in a bank vault. You can also file your will at your county probate court for a small fee. To make reviewing it easy, keep copies in your safe-deposit box and at home.

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