Headline: The Will to Win, Sort of.

Date: 12/27/2020

Body:  I just read a great article at The Penny Hoarder on the importance of setting up a Will.  It is linked below:

How to Write a Will, Even if You’re Young and Broke (thepennyhoarder.com)

WHOA, death AND taxes??  I’m gone!!

And, that is EXACTLY the point.  Usually, we work very hard to avoid these issues because it is “easier” to do so.   But, the flip side of the argument is that with a little pre-planning, you can ensure that your wishes are carried out as you want them to be.  As this can be a major weight off of your mind, the setting up of a Will is really an act of self-love, not preparation for an imminent death, as so many seem to believe.

Advanced directives and related documents are a very complicated topic, and consulting an attorney is a must for nearly everybody.   For the sake of “brevity” I will keep my discussion to discussion of a Will.

What is a Will and what are these legal terms I have seen?

WillThis document will designate your executor (the person who carries out your wishes after death) and lists your wishes with regard to distribution of your assets.
ProbateThis is the process whereby your executor receives permission from the Court to handle your affairs.
Living WillThis document, also known as an advanced directive, lists what medical treatments you do or do not want administered to you in case you cannot communicate your desires.
TrustA Trust is a document that conveys the obligation of a trustee to hold, preserve and grow assets for a third person, the beneficiary.
Revocable TrustA revocable trust allows you to retain control of the trust assets during your life.  Upon your death, the assets in the trust are transferred outside of Probate. 
Power of AttorneyNot a Superpower, this document allows the named person to make healthcare or financial decisions for you in case you are incapacitated.
Estate PlanAn Estate Plan is a comprehensive plan of how you want decisions to be made upon your death.   This plan could include all of the above documents, and crucially, it includes communication with your family of your wishes.

Should I get a Will?

So many people ask this simple question, but the answer is complex.  I lived in PA once, and asked an attorney friend of mine, and he suggested that for me, in that state at that time, no Will might be the better option.  However, most of the time, it is likely the best answer to have a Will.  According to a study done by AARP, 2 out of every 5 Americans over 45 have no Will.

One option, to avoid Probate, is to setup a “pour-over Will” where all assets in the Estate go into the Trust (and avoid Probate.)  In this case, the Will is very simple and merely instructs that 100% of assets go into the Trust.  The Trust (a service, accessible to more people than you’d think) can be important because even “simple” estates can take a year to go through Probate.   Some assets, like life insurance and retirement accounts can transfer outside of probate: Just be very sure that your beneficiaries are up to date.

What does a Will cost to setup?

 Sorry to sound like a broken record, but it really does depend.   If you have complex needs, and go to an attorney to get a bunch of these documents setup and executed, the package can cost you $2,500 or more.   But, if you have no kids, and your financial situation is simple (like me) you can go onto a site like LegalZoom and download a template Will for whatever state you reside in, for $25-$50.   So, the financial costs can be constrained, but I would strongly advise you to invest some time and energy into speaking with family members involved, too.  If you’re not all on the same page, the family members can sometimes contest the Will, and probate can drag on.    Before you purchase one of these “kits” please be sure to do your research on both the platform and the document itself.

I don’t see the need to invest in an attorney, but, I want some guidance.  What are my options?

If all that you need is a little basic guidance, then you have a variety of places to get that help.   Local libraries and not-for-profit organizations often have seminars that can offer guidance with no strings attached.   Five Wishes is a booklet including a template for several documents, and this booklet is a legal document in 42 states and DC.  Doing you will completely on your own is not legal in some jurisdictions, and not recommended anywhere.  (Even a Supreme Court Justice made a Will that was so poorly-written that his heirs spent over $450,000 in taxes and fees, during probate.)

The 9 Steps in setup of a Will

  1. Identify your assets
  2. Select your beneficiaries, carefully.
  3. Choose your Executor, carefully.  
  4. Select a guardian for your children.
  5. Be specific as to who gets what.
  6. If you wish to say more, then attach a separate letter.  This is called a Letter of Instruction, and can be useful and helpful, but be sure it is legally binding in your jurisdiction.
  7. Remember that when you sign your Will, you will need 2-3 witnesses who are over 18, and not to receive assets from the Will.
  8. Find a safe place for your will and empower somebody you trust to have access to it.   Also, place with it a statement with passwords and identifying information.
  9. Review and revise your Will after major life events like purchase of a home, marriage, birth of children etc.  You want to be sure that the right people are taken care of, and that the Court is not dealing with out-of-date information.

 The Verdict

It seems that the old saw might be true: When there is a Will, there is a way!!


10 Steps to Writing a Will | Family Finance | US News

How Do I Create a Will? | legalzoom.com

Cost of a Making a Will (investopedia.com)

10 Things You Should Know About Writing a Will – Assets, Inheritance (aarp.org)

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

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