You Do Have a Will, Don't You?
Everyone who is of legal age and has any assets at all should have a will. If you don't, and you die, the court will determine how your property gets distributed. It also will appoint somebody to take charge of closing out your estate. The person or firm appointed can charge up to 5 percent of the value of the estate, which won't come as a nice surprise to your survivors.
Most lawyers will draft a basic will for about $300, and it's an investment you simply can't afford to be without.
Don't Go There
Beware of generic wills that you can buy in office supply stores or stationary stores. Not all states accept generic documents, and these forms aren't customized, so they may not be exactly what you need.
What It Should Include
A will does not have to be long or complicated, or filled with language that nobody can understand. It does, however, need to include certain information. Basically, a will contains a description of a person's assets, property, and belongings. And it describes how those things are to be divided after the person's death.
A will also can contain specific instructions assigning certain items to individuals, and should name an executor to handle the estate. The executor is the person who administers the estate of the person who has died.
Many people include a letter of instruction along with their will to address more personal and specific issues. Some of those issues could include the following:
Special instructions for the funeral or burial
Detailed lists of possessions to be passed along to various people
Locations of all important documents and items
Lists of all insurance policies, stocks, bank accounts, access numbers, and so forth
Personal messages to family members or friends
A letter of instruction should not be kept with the actual will, but in a spot that is easily accessible in the event of your death. And make sure that your spouse or another trusted person knows that it's there. You can leave the most specific instructions possible for your funeral or burial, but if nobody finds them until three days after you've been buried, they're of no use.
Most married people name their spouse as the executor, unless there's a specific reason not to. When choosing an executor, keep in mind that it can be a time-consuming, tedious job. Don't appoint someone who will be overly burdened by the work involved.
An executor normally is responsible for seeing that the wishes of the deceased person are carried out, and for paying any owed taxes or outstanding bills. Other duties of an executor may include closing bank accounts, arranging for appraisals of assets, filing insurance claims, inventorying assets, notifying creditors, setting up checking accounts to use to pay bills, informing beneficiaries and distributing bequests, and filing final income tax returns.
When including an executor in your will, keep in mind all that is involved, and be considerate. Make sure the person you choose has both the time and ability for the job.
Making Sure It's Valid
Requirements vary from state to state regarding the validity of wills. Your lawyer will direct you in making sure that yours is valid.
A valid will must be dated, and signed by the person making the will, and at least one (usually two) witnesses. Generally, a will is a fairly straightforward document. Just make sure that you meet the basic requirements for validity to assure fewer problems for your heirs.
Deciding Where to Keep It
It's extremely important that your will is accessible in the event that it becomes necessary. While the original should be safely stashed away, it's a good idea to leave a copy of your will somewhere in your home, and for your spouse or another family member to know where it is.
The person who will be executor of your will also should have a list of your assets, and know where to find important papers regarding insurance and other legal and financial matters.
It's highly recommended that you update lists of your assets and liabilities each year. Having these on hand can make matters a lot easier for your executor if you were to die.
Many people keep their will, along with other valuables, in a safe-deposit box in their bank or credit union. Safe-deposit boxes are used to store personal property that is important or expensive, and difficult or impossible to replace. Many people use the boxes to store insurance policies, stock certificates, jewelry, birth certificates, property records, business contracts, adoption papers, inventories of household valuables, and so forth.
You have access to your safe deposit box during bank hours. Generally, two keys—one which you keep, and one that is kept at the bank—are needed to open the box. If you have your will in your safe-deposit box, make sure that a copy is available in a more accessible location, as well. And make sure that more than one family member knows the location of your safe-deposit box and where you keep your key. Many people make the mistake of sharing that information only with a spouse, never considering what would happen if both of you are killed in an accident.
Money Morsel
A convenient time to update lists of assets and liabilities is when you're gathering your income tax paperwork in late January or early February.
If the only copy of your will is in your locked safe-deposit box, and you die on Saturday, for instance, your will would be inaccessible until the bank reopened Monday morning. And some states require that safe-deposit boxes be sealed at the time of death, although a survivor normally would be able to retrieve the will before that happened.
When you write and sign your will, your lawyer may suggest or request that the original copy be stored in their office vault. The charge is free, and a great service, if friends or family know that the will is held there. Also, the attorney who prepared your will does not need to be the same lawyer who works with your executor to settle your estate. The attorney who prepares your will is your lawyer. Your executor may prefer to work with someone else.
Regardless of where you choose to keep your will, it should be in a place that's known and accessible to others.
Excerpted from The Complete Idiot's Guide to Personal Finance in Your 40s and 50s © 2002 by Sarah Young Fisher and Susan Shelly. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.
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