The understanding that we will eventually die is one of the things that sets us apart from other living beings. Nevertheless, none of us likes to contemplate our own mortality. However, if we simply choose to postpone planning for our demise until it is too late, we run the risk that our intended beneficiaries – those we love the most – may not receive what we would want them to receive whether due to extra administration costs, unnecessary taxes or due to squabbling among our heirs. This is why proper estate planning is so vital, no matter how small your estate may be. It allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to minimize possible estate or inheritance taxes, reduce court costs and attorneys’ fees; and, most importantly, it affords you the comfort of knowing that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.
All estate plans should include, at minimum, three important estate planning documents. Namely, a Last Will and Testament, a Durable Power of Attorney and a Living Will. This month we’ll address the importance of having a Will. Your Will is a legally- binding statement directing who will receive your property at your death. It also allows you to appoint a personal representative (Executor/Excutrix) to carry out your wishes.
Why should you have a Will?
Here are some very important reasons:
- First, with a Will you can direct where and to whom your estate (what you own) will go after your death. If you die intestate (without a Will), your estate will be distributed according to your particular state’s laws. Such distribution may or may not be in line with what your wishes are. Many people try to avoid probate and the need fora Will by holding all of their property jointly with their children. This can work, but often people spend unnecessary effort trying to make sure all the joint accounts remain equally distributed among their children. These efforts can be defeated by a long-term illness of the parent or the death of a child. A Will can be a much cleaner and easier means of effecting one’s wishes about how their assets should be distributed.
- A second important reason to have a Will is to make sure that, should your estate need to go through the probate process, the administration of same can be completed in a more timely and uncomplicated manner. Often the probate process can be completed more quickly and at less expense to your estate if there is a Will. Namely, with a clear expression of your wishes, there are unlikely to be any costly, time-consuming fights or disputes over who is entitled to receive what.
- Third, only with a Will can you choose the person who will oversee the administration of your estate and distribute it in accordance to your instructions. This person is called either an Executor/Executrix or Personal Representative depending on your state’s particular statute. If you do not have a will naming such a person, the court will make the choice for you. Usually, the court will appoint the first person to petition to be appointed, whoever that may be.
- Fourth, for larger estates, a well drafted Will can help you to greatly reduce potential estate and inheritance taxes.
- Fifth, and most important, through a will you can appoint who will take your place as both guardians and trustees of your minor children should both you and your spouse both pass away. DON’T PROCRASTINATE! Getting a simple Will drawn up is not a particularly difficult or expensive proposition.
At our law firm we have been preparing simple Wills for our clients for close to twenty years starting at just $75.00. Remember, you’re better off safe than sorry. Next week we’ll discuss the importance of having a well drafted Durable Power of Attorney.