Estate Planning

Writing a will

Is a will really necessary? A will dictates who will receive your assets. If you have no assets, or if all of your assets pass by beneficiary designations such as retirement plans, you can probably get away without a will. However, most people own something, and a will allows orderly disposition of your assets and personal property. Without a will, court proceeding will occur that will determine who is supposed to inherit your estate, and this usually costs more than creating a simple will.

What assets pass through a will?

There are three ways assets pass to your heirs:

• Beneficiary designation - retirement plans, life insurance, and annuities pass by beneficiary designation. You can even create beneficiary designations for bank accounts and non-retirement brokerage accounts. None of these assets will pass through your will if you have a beneficiary designated.
• Titling - assets that are titled jointly with rights of survivorship do not pass through a will. For example, if you have a joint bank account with a spouse or a child, that asset will pass to your spouse or child directly when you die. Non-retirement accounts, property, and businesses can be titled jointly.
• Assets that pass through your will - these are all the assets that do not have beneficiary designations or joint titling. Individual checking or savings accounts, individually owned real estate, and personal property pass through your will. Assets that pass through your will require probate to make certain the assets end up in the right hands according to your will.

How do I create a will?

If you have very few assets and no underage heirs, you may be able to use software to create a will. If you decide to do this, it is very important to have as many assets as possible to pass to your heirs by beneficiary designation or titling. If you die with a will you created on the internet and have assets that must go through probate, it may be difficult to find an attorney to help at a reasonable cost. Attorneys generally don't like to deal with documents they did not create.

Ideally, you should seek an attorney to create your will. If you do not have enough to pay an attorney, there are free legal services available to those who qualify.

What do I need to put in a will?

These are the important components of a will:

• Executor or personal representative - this is the person who makes certain your assets pass appropriately to your heirs. They must be organized, good with detail work, and thorough or willing to hire someone to do this job for them. This position lasts until all your assets are distributed. It is important to name a backup just in case the person you name first is unable to perform this function.
• Trustee of any trusts - assets for minors, spendthrifts, or people with special needs should be left in trust. You will need to appoint a trustee to manage the trusts and a backup in case the person you name first is unable to perform this job. This person must be organized and good with finances. It is good to have a trustee who cares about the beneficiaries of the trusts so they will make decisions in the best interest of the beneficiaries. They can hire professional help to assist them if needed.
• Guardians for your children - if your children are underage, and both you and the other parent are deceased, you must have someone willing to raise your children. It is good to appoint a backup to your first choice.
• Beneficiaries of your assets - these are the people, trusts, or charities who will receive your assets.

What do I do with my will once it is completed?

It is good to share the contents of your will with your heirs. This will reduce the chance of family fights after you have died and provide everyone with clear instructions on how you want your assets to be distributed.

Your original will should be kept with your attorney or in a very safe place. Make certain your executor knows the location of your will, as they will need the original copy. By having everything well organized, you will reduce the time and cost of distributing your assets to your heirs.