Writing wills and trusts
Only about 55 percent of Americans over age 65 have a will, down from 74 percent in 1991, and there’s a simple reason.
“It’s difficult to talk about death and money,” says author Colleen Barney.
Deciding who will care for the kids is the toughest part of writing a will, says Barney, author of Best Intentions: Ensuring that Your Estate Plan Delivers Both Wealth and Wisdom. But ignoring the topic could one day leave this tough decision in the hands of a probate court judge.
Technical requirements for wills
Any adult of sound mind is entitled to make a will. Beyond that there are just a few technical requirements:
1. The will should be typewritten or computer-generated, although legibly handwritten wills may be acceptable.
2. The document must state that it is your will.
3. You must date and sign the will.
4. The will must be signed by at least two witnesses; they must watch you sign the will although they don’t have to read it. Your witnesses must be people who won’t inherit anything under the will.
You don’t have to have your will notarized; however, if you and your witnesses sign an affidavit (sworn statement) before a notary, it can help to simplify the court procedures in proving the validity of the will after you die.
Will-writing kits and books usually have checklists to prevent mishaps, but no one is looking over your shoulder to make sure you follow the checklist.
Attorneys, on the other hand, are trained to follow the rules and are responsible for doing so.
Involving children and spouse
Consider one person as the financial guardian for those under age 8, and another to care for them on a day-to-day basis.
Discuss your choices with the guardians and children. Write a letter explaining how you want the children raised, and another about how you would like your possessions divided and why you made those decisions.
That was the easy part. Raising the subject with a reluctant spouse may require a back-door approach, such as telling about a co-worker’s messy situation in baffling a sibling over the parent’s estate.
Inheritance was once a simple affair for all but the wealthy. Rare was the estate that included much more than a house, a bank account, and an attic full of Christmas ornaments. Today, however, stocks and bonds make up 40 percent of the assets that are left to heirs.
Today’s retirement assets, such as 401(k) plans, are inheritable assets and can complicate matters more.
Setting up a trust
You might also consider setting up a trust to handle gifts or manage your money while alive.
There are two types of trusts: revocable and irrevocable. The revocable trust can be changed or revoked by the trust creator, while the irrevocable trust cannot be changed or revoked.
Basically, a trust is a separate legal entity that pays its own taxes and holds its own title to property. When the trust is set up, it appears on official papers and records as the legal owner of any property given to it.
The trustee administers and manages the trust, making investment decisions, paying taxes, and otherwise taking care of the property.
Trusts can be more expensive to set up and maintain than an ordinary will, and there may be no tax advantages over a will. But a trust is not probated, unlike a will, and the trust recipients are guaranteed privacy and have immediate access to the funds.
ONLINE HELP FOR WILLS AND TRUSTS
There’s plenty of help available in writing a will or setting up a trust:
•Do-it-yourself instructions at www.laweasy.com from Martin Shenkman, an estate planning attorney.
•Software like Will Maker, available for about $50 from www.nolo.com.
4 If your estate is complicated or you want some professional handholding, hire a local attorney with estate planning experience. For one in your area, go to www.findlaw.com.