Wills, Trusts, and Probate
If your parent dies without a will, it's known as dying “intestate.” The state then determines the rightful heirs and how much they receive. The state—and Uncle Sam—take a greater chunk of your parent's estate than if he or she had a will. Even probate costs are higher. The courts appoint someone to manage the distribution of your parent's estate—again, for a fee. The bottom line: Everyone should have a will!
We all know the routine: “I, Janie M. Smith, being of sound mind, hereby bequeath …” and away you go, giving away everything you own. A will is simply a legal document that provides instructions on how your parents want their property to be passed on to their heirs after your parents die. Witnesses (who don't benefit from the will) are needed, and the will must be in writing and clearly dated. Don't consider a will to be written in stone. Families and circumstances change, and so should wills. Many experts recommend that each parent have his or her own will to avoid the complications of a joint one. This holds especially true if your parents have remarried.
Wills usually describe assets, property, and personal possessions and how they are to be distributed after someone dies according to the owner's wishes. Most often the will passes down assets to a surviving spouse and then to children. In a will, your parent needs to identify who will administer his or her estate— meaning pay taxes and outstanding bills, and assure that the instructions in the will are carried out. The person who does this is known as the executor (if a man) or executrix (if a woman).
Letter of Instruction
Often, people will include a “Letter of Instruction” (also known as a “Tangible Personal Property Memo”) along with their will. This is an informal, nonbinding letter that describes your parent's wishes that are not included in the will. A letter of instruction is an extra ounce of prevention against family disputes over the “small stuff.” Here are some examples of what might be mentioned:
- Who receives pieces of furniture, jewelry, mementos, collectibles (records, baseball cards, books), family china, clothing, plants.
- Arrangements to care for a pet(s).
- Funeral and burial instructions. Who should receive memorial contributions.
- The location of all important legal documents.
- A list of all insurance policies, stocks, beneficiaries, bank accounts, identification of passwords, and PIN numbers.
- Instructions regarding credit cards, mortgages, titles of cars, properties, the location of income tax returns, and a list of debts.
- Instructions regarding business files, software, equipment, and the password to the computer.
- Personal wishes on how your parent would like to see the heirs spend or invest their inheritance.
More on: Aging Parents
Excerpted from The Complete Idiot's Guide to Caring for Aging Parents Ã‚Â© 2001 by Linda Colvin Rhodes, Ed.D. 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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