Make a will and forget it.  That's a bad idea because if you leave say 20% of your assets to your 3 grandchildren and you name them, and subsequently, you have another grandchild, the new grandchild would get nothing be he is not names.  Rather, if you leave 20% to be divided equally by all your grandchildren, should you have another grandchild, any new grandchild will be included in your bequest.  In other words, when you make a will, assume that the people may change so it may be best to leave your assets to different categories such as your children or grandchildren rather than name specific individuals.

When you make a will, be careful about this inheriting people such as a spouse. If you live in a common-law state -- and 41 states are, along with the District of Columbia -- you can't disinherit a spouse. You typically must leave him or her one-quarter to one-half of your estate, depending on the state's laws. The same goes for improperly dis-inheriting a child when you make a will. In most states, a child has a good chance of getting a share of the inheritance if he isn't mentioned in the will at all. If you really want to disinherit a child state the name in your will and the reason so you have the best chance of your wishes overriding any inherent rights of your child.  Or, another option is to Leave the child you wich to disinherit assets that may be less important to you with a "no-contest" clause that revokes the bequest if he challenges the will.

When you make a will, you assume that your beneficiaries well live you.  That is not always the case.  So take into account every beneficiary passing away before you do.  Let's assume you leave some assets to your son John.  Should he die before you do my guess is that you'd like to leave that portion of your assets to your other child.  However, if you will states that the assets be left to John and he dies, then the assets you would've left him will go to his estate and will quite possibly passed to his ex-wife who you've always hated.  So when you make a will, you see the problem of naming individuals and assuming that they will all outlive you.  Make a provision for every person you name not outliving you and where their share will go.

Making a will that does not coordinate with your non-will assets.  Remember that some assets you have pass outside of your will such as IRA accounts 401(k) accounts annuities and life insurance.  Therefore when you're thinking about dividing the assets for example equally, when you make your will, remember that there are certain assets to exclude because they already have specifically named beneficiaries that will override anything in your will.

Dying Without a Will is Incredibly Selfish

A will is not for you because you will be dead!  Anyone who dies without a will is per se, selfish.  if you have family members and you simply don't give a hoot about their inconvenience, additional grief or heartache sorting out your affairs, then you don't need a will.  However, if you think of yourself as a caring person who wants to do the best for his loved ones, then you need a will (or living trust).

Per Consumer Reports magazine, more than 2/3 of Americans die without a will - selfishness abounds.

A will is not only about who gets your stuff. The most important part of the will is the designation of custody of minor children. If you are responsible for minors and die, then do you like the idea of the court deciding who raises them and what is best fo their welfare?  If not, then write your will TODAY!

Without a will, the courts will have to determine who gets what! And, if you have property in multiple states, each state will determine the results separately through a process knows as probate.  So if you like hassling your family members with all kind of stupid rules from various states, go ahead and drop dead without a will.

The probate process is when the state courts will inventory your stuff, it will gather information about claims made against the estate (e.g. money you owe folks), investigate all claims for their validity, pay off outstanding debts, make decisions as to who gets what based on state laws where the property is located.  It does not matter what you want--if there is no will, anything you told someone or expressed as your desire does not count.

What happens to assets with Co-Ownerships & Joint Tenants?

Property that's titled in "co-ownership or as joint tenants with right of survivorship" such as husband and wife, automatically goes to the co-owner's or spouse. Similarly property that's titled as "tenants by the entirety" immediately becomes the property of the other tenant. Property that's owned with someone else as "tenants in common" (usually the way you hold assets with a business partner, if unrelated) becomes a probate asset and is distributed according to the terms of the will.

Who may create a Will?

Any person over the age of 18 may draft his own will with or without an attorney. The creator of the will is required to clearly identify himself/herself as the maker of the will, must revoke all prior wills, must state that he/she is of sound mind, must identify each item of property or personal effects, and must clearly identify each person to receive such property. If there are minor children the creator must clearly identify the person or persons to take custody of the minor children, and the creator must identify who will become the executor of his/her will after the creator's death.

In most states, to be valid, the will must be signed in front of a notary public, or in front of two "disinterested parties over the age of 18" (not family members). It's best that the will be notarized, signed in front of a notary public which the notary will append their notary stamp on the original signature.

The most common mistake is that a will is signed by family members, another common mistake is to disinherit a family member or close friend. It's best to mention the individual by name and to give them a small amount rather than to intentionally leave them out of the will. The excluded member may sue the estate, and therefore cause unpleasant and unwanted delays. yes, your pissed off relatives can sue for their "fair share."

What happens after th Will Creator Dies?
When you die, the will gets administered by the local state probate court where it becomes a "public document" and is available to all interested parties and creditors (so if you want to keep your matters private, get a living trust and not a will).

Know that during the probate process, the assets may be frozen.  So if someone depends on your assets or cash for support, they will now know you really could care less about them.  Die without a will--your most selfish act right at the end!

Do you need a Will or Trust?

The differences between a will and a trust:

A will is a public document and as such, is available to anyone who goes down to the courthouse and wants to see how much you owned and to whom you left it.
A trust is a private document and is seen only by your family members, the trustee you name and any attorneys they select to help them settle your estate.

A will must be probabted--processed by the court which can take several months or possibly more than a year.  During this time, your assets may be tied up.  A trust does not need to get probated and your assets can be instantly distributed to your heirs.

Because you must assign (i.e. title) assets to your trust and some people forget to do that, it is always a good idea to have a pour-over-will which is basically a document that says any assets you forgot to assign to your trust, to do so.

What if I die without a will or a trust?

Not a good idea as each state has laws that determine how your property is distributed and to whom.

Typical rules would have your assets divided as follows:
If you die leaving a surviving spouse and children, your spouse gets one-half of your estate and your children share equally the remaining one-half. Special rules apply if you have children from a prior marriage and you have property acquired during your last marriage as well as separate property.

If your children are minors, your surviving spouse, in order to use their portion of your estate for their support or education, would either have to be appointed guardian of the children by the court or have someone else appointed, give a bond, make annual accountings to the court and obtain the court’s permission for many routine transactions. This will result in considerable expenses as well as legal difficulty.

Why doesn't everyone have a trust rather than a will?

Good question.  A trust is advanatgeous.  Many people feel comfortable drafting their own will but feel a trust is more complex and they need to pay an attorney severl hundred dollars. In fact, there are living trust kits that allow you to draft your own trust on your computer.

What are the advantages of having a will vs a trust?

Generally, the cost to prepare a will is less than the cost of preparing a revocable or living trust, if done by an attorney. With a trust, you must always remember to title property in your trust or the trust will have no value--it won't apply.  For example, if you purchase a stock, you don't purchase the stock in your own name.  You purchase it as "Mary Smith, trustee of the Mary Smith Living Trust, 12/1/11."  If you don't carefully make sure you always title investments, real estate and other items in the name of the trust, the power of the trust will not apply.

What Happens During the Probate Process
Not everyone is subject to the probate process and in a related post, we tell you how to avoid probate. But if you die with a will or with no will and no trust and have not taken steps to avoid probate, then your assets will be subject to the process.

The two people involved are an attorney, appointed by the court (and that is why you have fees) and the executor, the person you have appointed in your will to distribute your assets. Typically, the executor is your main beneficiary (e.g. your son) who is also entitled to a fee but it is foolish for him to take the fee if he is also the sole beneficiary. (If he takes the fee, it is taxable income.  But if he simply inherits the money, there is no income tax to him).
In some states you can avoid the probate fees as the state may allow you to have your executor do all the steps and avoid the court-appointed attorney or some states have a "small estate exemption" that can avoid probate.  For example, for estates under $100,000, the probate process is skipped.

The whole purpose of probate is for the government to insure that your assets are correctly distributed either by the instructions in your will or, if you have no will, based on state law.

Why Estate Planning Is Important – Not Just for Wealthy

To get a will is just one segment of estate planning and estate planning is important even if you have few assets.

Estate planning addresses these key questions:

• Do you want input into how you would like to be taken care of when you become incapacitated?
• Do you want to be sure that your assets go to the people you choose when you die? (that's exactly why you need a will)
• Would you like to eliminate or minimize needless loss of some or all of your assets when you need long-term care?
• Would you like to minimize excessive taxes on what you want to give your beneficiaries (if you have significant assets)?
• Do you want to prevent public exposure, costs, and delays of probate (you may need a trust rather than need a will)?

These are important questions and virtually everyone will answer ‘yes’ to all of them. Making arrangements to satisfy each question is what estate planning is all about.

But what is especially important is making arrangements to address these questions ASAP because of these four circumstances:

1. You never know when you will die. Therefore, you need a will at very minimum to insure your assets go to those you want and not to those determined by the state.
2. You never know when you will become mentally incapacitated.
3. You never know when you may need long-term care.
4. Arranging satisfactory solutions to some of these questions requires three to five years lead time--at least--before these circumstances occur!

Consequences of not addressing these questions are:

Incapacitation: You are treated in a manner you would never wish to be. Someone other than your choice determines how your money is used and distributed (the government).

Your assets go to someone not of your choice: With no will, your assets will be distributed according to state rules–not your wishes.

Without a trust or will, you must trust your current spouse to give assets to your previous children.  That's not a good idea so you need a will or a trust.

Long-term care: Without long-term care insurance or a lot of wealth, paying direct long-term care costs can wipe out a small estate easily.

Probate: Public exposure on who is getting your assets can trigger legal claims and hard feelings between potential beneficiaries and other relatives. A will is always public so you need a trust to keep your matters private.

Why you may not need a will

If you read the first post in this blog, you can see that it's so easy to have a will prepared, there is no reason why not to.  However, it's quite possible you don't even need a will.

There is a general trend in state legislatures to remove the need of everyday people to seek the services of an attorney for simple matters.  For example, as mentioned in the first post, many legislatures have approved the standard-form will that you can buy in the stationery store for a couple dollars.  Some states have gone even further with the following provisions in their laws:

Pay-on-death
If you have accounts at banks, you can title those bank accounts with a pay on death provision.  That simply means that should you die, the bank account will pass immediately to the person(s) you specify.  You don't need a will or to do anything other than placing the name of the person on your bank account.  This author is not aware of any state that does not permit the pay-on-death designation.

Transfer on death
Some states allow the pay-on-death concept to be used for assets other than bank accounts.  Specifically, some states allow you to name a beneficiary for individual pieces of real estate or securities accounts.  These are called transfer-on-death rules.  You can check with the title company in your state and also your brokerage firm to see if the transfer-on-death provision can be used for your assets.  If so, then again, you can have this asset pass directly to your named beneficiaries and you do not need a will to do so.

IRAs, 401(k)s, Annuities and Life Insurance
Some assets have always had the provision to designate a beneficiary (applies to all 50 states).  With these assets, no matter what your will says, the asset will pass directly to the named beneficiary.  These assets are most any type of retirement account or life insurance product such as life insurance or annuities.

In all cases above, the asset passes to your beneficiary without probate and without the need of a will.

There are two reasons you need a will:

1.  You never know when you'll die
2.  If you die without a will, the state in which you reside will determine who gets her property

It is very important to understand that laws having to do with the distribution of your property are state laws.  Therefore, any comments in this post are general in nature and will vary in each of the 50 states.

Where to Get a Will

In many states, getting a will is as easy as going to a stationery store and purchasing a state approved form that serves as you will.  You simply fill it in, have witnessed by two other people and it becomes a legally binding document.  In other states, the legislature may not have approved a pre-formatted will available at the stationery store.  in those cases, you can use a general form will that you can find in many books.  For example no low press, a publisher of self help legal books, has both books with will forms in them and also software that you can use to create your will.

The solutions above do not require an attorney.  However, if you are worried about preparing such a document on your own, you may be able to get help without having to pay an attorney.  Some counties have a public legal help agency.  There, you can visit with an attorney or a paralegal at little or no cost and they will help you prepare a will.  Another option, which is a low-cost, are stores in the business of helping per people do their own legal documents.  These stores have the documents and sell their assistance for preparing wills or trusts or divorce papers at very modest costs, much lower than an attorney would charge.

There you have it.  The easy way to satisfy your need to have a will.

To Make a Will Useful

Once your will is complete, make sure that the people who need to know where it is located know that information.  For example, in your will you will need to name an executor.  The executor is the person who actually carries out the instructions in your will.  Typically, this is a family member or very close friend.  That person should get a copy of you will and know where the original is located.  You may also want to give copies to your beneficiaries, the people that will be inheriting your property.

The last thing to keep in mind is that certain of your assets do not get distributed based on what your will says.  For example, if you have an IRA account or a 401(k) account through your employer, on those assets, you name a beneficiary and that is the person who will get that asset regardless of what is in your will.  The same is true of annuities.