Will writing 101
An estimated 70 percent of adults in Kentucky do not have a will or trust. Some people put off making this vital step because they fear the legal costs, which can run from $300 to $1,000. (A trust generally costs more.) However, there are several Web sites where you can customize a will quickly and easily. Check out www.buildawill.com or www.legacywriter.com. They charge $19.95.
Wills guide survivors on subjects as diverse as the distribution of assets to guardianship of minor children.
You also need to draw up a durable power of attorney, which names someone to manage your affairs if you or your spouse cannot, and a living will, which tells hospitals what to do regarding life-support.
Now is also the ideal time to locate and update financial documents, such as life insurance, IRAs, and bank and brokerage accounts. See if the desired co-owners and beneficiaries are named. Also, jot down lock combinations and locations of hidden valuables to ease the task of survivors.
Some financial planners urge their elderly clients to get rid of liquid assets, such as real estate scattered across several states, and rare coins.
If you own a second home in another state, consider holding it in a living trust to avoid the complexities of across-state-line probate settlements. (A trust agreement generally permits direct gifting or sale without the court’s approval.)
In addition to a will or trust, you should draw up a letter of instruction—a simple list of information ranging from contents of safety-deposit boxes to copies of business agreements—and give it to a trusted family member.
Finally, make certain your intentions are crystal clear and talk to your heirs about how much they are likely to inherit, thus reducing the chance of a family fight after your death.
Often a family member or close friend is named executor of the deceased’s estate, but most do not realize the work or complexity of the task. As executor, your duties include inventorying, appraising, and distributing assets, paying taxes, and settling debts owed by the deceased. You are legally obligated to act in his or her best interests, following the wishes expressed in the will.
As executor, your first duty is to petition the court to get the will probated, or approved. (A trust is not probated.)
You will need the original will, a certified copy of the death certificate, and be prepared to pay court costs, which are chargeable to the estate.
Once the will is determined to be valid, you can begin to pay taxes (including any due on the deceased’s final state and federal tax return) and other claims against the estate, and distribute assets to the beneficiaries.
While pursuing assets, “If you’re lucky there’s a box with everything in it,” says Stephen Maple in an interview with the Wall Street Journal. “If you’re unlucky, you’ll have to monitor the mail, and see if you can find the last tax return. The tax return will give you a kind of checklist,” says the author of The Complete Idiot’s Guide to Wills and Estates.
You will also have to:
• Send notices of the person’s death to the post office, utilities, banks, and credit card companies. (This is why you should get at least 10 certified copies of the death certificate from the funeral home.)
• Check with the deceased’s employer for unpaid salary, insurance, and other benefits. File for Social Security, civil service, or veteran benefits.
• File for life insurance benefits.
• Cancel magazine subscriptions.
• File papers with the court to finalize the estate.
For your own protection, you should keep a copy of all records for at least two years.
And don’t hesitate to hire an attorney or accountant if you need professional help. The costs are chargeable to the estate.
WEB RESOURCES FOR WILLS AND SENIORS
There’s plenty of help available on the Web for seniors: Consider visiting Eldercare at www.elderweb.com for financial and legal matters, the National Academy of Elder Law Attorneys at www.naela.org, or the Funeral Service Educational Foundation at www.nfda.org to order free pamphlets on death, bereavement, and funerals.