Learn More: Your
Will | Why Have a Will? | Your
Estate
Imagine the peace of mind you’ll feel once you’ve
clearly and legally articulated your final wishes. Luckily, the
process need not be overly time-consuming or expensive.
Timetable
Your personal circumstances will dictate the amount of
time it takes to draft your will. A simple will might require
little more than an hourlong discussion with an attorney, plus
a return visit to sign the finished paperwork. Obviously, more
complicated estates will require increasingly careful planning
and execution. Regardless of the timetable, the benefits of creating
a will far outweigh the emotional pain and financial disarray
that can result from not having made the effort.
Cost
The cost of drafting a will depends largely on where
you live. People in some parts of the country have created simple
wills for a few hundred dollars. For the same services elsewhere
you might pay several times that amount. Whatever the going rate
in your area, resist the urge to look for a “deal.”
Nor should you rely solely upon do-it-yourself forms. Enlist the
services of a qualified attorney, whose knowledge and experience
will ultimately save you money and heartache in the long run.
Regardless of your life circumstances or estate size, your will
is perhaps the most important document you will create. A thoughtfully
crafted will expresses your wishes and values and effectively
provides for the people and charitable causes important to you.
Unfortunately, many people put off making a will. Here are eight
important reminders why you need a will.
- Without a will, your state’s laws—not
you—determine how, when and to whom
your property is distributed.
- You can reduce (or perhaps even eliminate) estate
taxes and save taxes in a survivor’s estate.
- You can name your executor to manage and settle
your estate.
- You can designate beneficiaries for items such
as heirlooms, art objects, jewelry or real estate.
- You may create trusts to provide for your spouse,
children and others.
- Through a pourover will, you can transfer leftover
assets to your living trust, bypassing probate.
- You can support your favorite charitable organization(s)
through a bequest, which is simple, flexible and tax deductible.
- With a will, you can designate the guardian
you wish for those under your care.
The estate plans that you make now affect the
lives of many people and organizations you care about, and your
decisions should be thought through carefully. Chances are you
will act on some decisions now, but other choices need to be reviewed
periodically to see if they still reflect your current circumstances.
In planning your estate, you will need to create several legal
documents to protect the financial stability of loved ones and
protect your health when you are unable to make medical decisions
for yourself. These basic estate planning documents provide invaluable
benefits.
Will
The basis for your estate plan, your will dictates property
distribution, names your personal representative and establishes
guardianship.
- Property Distribution.
Your will instructs how to distribute assets at your death.
If you have no valid will, the state where you live decides
who benefits from your estate.
- Your Personal Representative.
This person, named in your will, pays bills and taxes for your
estate, collects income due to the estate, and distributes your
assets.
- Guardianship. Your will
allows you to name the person you want to make decisions for
those under your care.
Trust
During your lifetime you may also wish to create a revocable
trust—meaning that you can abolish or amend the trust at
any time. Assets not placed in your trust during life can pass
at death through a pourover provision in your will. Because you
control the assets placed in the trust, they will be included
in your estate and fully taxed.
You may also wish to consider establishing accharitable
remainder trust. Through this type of trust you can receive a
lifetime income and designate the remainder to go to one or more
charitable beneficiaries at your death—and receive valuable
tax benefits.
Power of Attorney and Durable Power of Attorney
These important documents allow the holder of the power
to act for you if you are unavailable to make financial decisions
such as buying, selling and discharging your debts. The durable
power of attorney, however, allows the holder to make business
decisions even when you are mentally unable to make decisions
for yourself.
Living Will/Health Care Proxy
A living will lets you decide whether you wish to have heroic
medical measures taken to save your life when you are sick. A
health care proxy allows you to choose someone to make health
care decisions for you if you are unable to communicate your wishes.
Individual and Charitable Beneficiaries
Personal feelings and common sense will guide you in determining
how to distribute your estate. Including family members in your
estate planning process may allow them to be more understanding
and supportive of your decisions.
Through your will or trust, you can name charitable
organizations to benefit at your death, effectively removing assets
from your estate and possibly reducing your taxable estate. Making
a charitable bequest to Cor Jesu Academy at your death allows you
to retain your assets in case you need them during your lifetime.
The information in this publication
is not intended as legal advice. For legal advice, please consult
an attorney. Figures cited in examples are based on current rates
at the time of printing and are subject to change. References
to estate and income tax include federal taxes only; individual
state taxes may further impact results.
