Do You Need a Will?

Do You Need a Will?

The answer is probably yes. Here’s why and what it should include

More than half of American adults do not have wills, according to the American Association of Retired Persons. True, if your estate in under a determined sum (this amount is the case for most Americans) – your heirs may be exempt from paying estate taxes, but that doesn’t mean that you don’t need a will. What are the potential consequences of not planning for the disposition of your estate?

Boston attorney Alexander Bove, the author of the Complete Book of Wills & Estates (Henry Holt).

What happens if I don’t have a will?

If you have no will, your estate will end up in probate court and many important decisions will be out of your hands. Normally, you name an executor, a trusted friend or family member who is responsible for determining taxes, assets, bills, debts to be paid on your estate. Without a will, the court becomes the executor and your estate is divided under state laws.

What are the most important components of a will?

As a rule, wills are broken up into two parts. Specific bequests include specified property, such as specific amounts of money, real estate, and stocks that are left to a designated beneficiary. The residue is everything else, or everything not specifically defined, and will normally go to the primary beneficiary of the estate, usually a spouse, children or both. Only property in your name at the time of your death can be passed on to your heirs.

Don’t forget to write a will! Photo by Elena

What are living wills, health care proxies, and durable power of attorney, and why are they important?

A living will is a declaration that indicates whether you would want to be kept alive by artificial means in the event that you are diagnosed with a terminal illness.

A health care proxy allows you to appoint someone to make medical decisions for you.

A durable power of attorney names someone to make financial transactions for you. If you don’t have a durable power of attorney, and if your assets or property need to be transferred, your beneficiaries would have to go to probate court in order to appoint a conservator or guardian.

How often should I update my will?

Whenever there is a major change in the tax laws, or if there is a change in your family or your family’s finances.

How can I provide for minor children?

If you have minor children, you should be sure to name a trusted relative or friend as the guardian who will be responsible if the person and property of the minor child.

What is the difference between a will and a living trust?

A living trust is a legal document that you create while you are alive. You can transfer assets to the trust while you are alive, and the trust governs the assets. You may be your own trustee. Whatever is in the trust does not have to pass through probate. Whatever you do not put in the trust goes into a will. A living trust – including a will, a durable power of attorney, and health care proxy – and a living will are the typical documents in a modern estate plan.

How much should I pay to have a will drawn?

It depends of the complexity of the estate. The process of drawing up a will can range between $100 and $10,000, depending on how complicated it is. Often the amount of property is not as important as the family circumstances.

We'll die one day or another. Everyone will. Illustration by Elena.