You need a will. I posted a “letter” to a friend that did not have a current will and followed this up with a checklist on how to get started. This was exactly one year ago. I spoke to this friend and his wife a few days ago, and they still haven’t done anything.
Both blogs are combined here with some editing, and I am reposting it with the hope that they will do something. I also know more than a few other people that are in a similar situation, and I will call them and send a link to this blog trying to get them to get it done. If you know someone in such a situation, then perhaps you can forward this blog to them also with a note for them to get it done.
Please follow through. This is important stuff.
Dear Friend,
Having a current will is essential to ease the settling of an estate, avoid confusion after your death (or the death of your spouse), provide for everyone you want to, make sure there is adequate liquidity for your spouse or other beneficiaries, make charitable bequests if that is something that is important to you, designate who would be in charge of settling your estate, and if you have minor children, who would be their guardian and what regular payments should be provided to them while they care for your children as they grow into adulthood.
If you have beneficiaries that you want to leave funds to but do not want to leave it all at once, you can arrange for a trust that would be activated when your will is probated. This could be for beneficiaries that you might feel would not handle the “windfall” in the best manner, minors for their college funding or a car, or to leave income or cash flow to one set of beneficiaries and the principal to others.
Before meeting with your attorney, you should prepare a list of your assets and liabilities and a list of accounts where you named a specific beneficiary, such as an IRA, 401k, 403b or employer’s or union pension and life insurance policies. The designations of beneficiaries for those accounts create bequests that are not covered by your will and are not part of the probate process. This is very important and is something that you should fully understand. Your attorney could explain this when you meet. Alternatively, your CPA or financial planner could also explain this to you.
I am writing this to people I assume already have a will, just that it is not current. If, perchance, you do not have a will at all, then you should get one forthwith. If you do not have a will, then a government employee will decide how your assets get divvied up, the timing of distributions, how the funds are invested, and which friend of the judge will get the job of managing your assets. Besides the fees for that person, there will be added legal expenses and other costs such as insurance bonds, public advertisements and maybe estate or inheritance taxes. Further, the likelihood of consternation and altercations among your family would be much greater when there is no will.
In addition to the will, you will also need a health care power of attorney, a living will, a financial power of attorney, and depending upon your situation, possibly a trust. These important documents permit someone to make decisions for your medical treatment if you are unable to and whether or not to “pull the plug” if that becomes an issue. Getting this done also gives you the opportunity to speak to these people beforehand to find out if they will accept these responsibilities and for you to explain your wishes and to get their agreement to follow those wishes as best they can.
When you prepare, you should go over everything with your spouse before meeting with the attorney. If there are disagreements that cannot be resolved, it is OK to have differences in each of your wills. Work this out beforehand so you will not sit in front of the attorney arguing about details that easily could have been resolved in your home.
Following is a preliminary checklist to help you get started.
- Make a listing of all your assets and liabilities
- Prepare a listing of intended beneficiaries and secondary and successive beneficiaries
- Make a list of what distributions you would want to make to each beneficiary, including specific property you might want to leave to them
- Decide if bequests will be made outright or in trust. If in trust, determine who would get what and when and also who the trustee(s) would be
- Decide who would be your executor and an alternate to them
- Obtain copies of all of your previously signed designation of beneficiary forms. This would include IRAs, Roth IRAs, 401k, 403b, pension plans, and life insurance policies
- If you have minor children, decide whom you would want to be their guardian should you and your spouse die prematurely
- Work out if there would be adequate estate cash flow and liquidity for your spouse and also for the guardian’s added costs of caring for your children
- Decide whom you would want to make decisions on your health care should you be unable to
- Decide whom you would want to make the decision to end your life (or not) should that terrible event be necessary
- Decide whom you would want to handle your finances and pay your bills should you not be able to
- Decide if you want to make any bequests to charities
There are other issues to decide on and make decisions for, but this list will get you started with many of the things that I see that keep people from moving forward. Some of these are tough to consider, but you really need to confront them. If you don’t, and if these decisions need to be made, you would have passed it on to someone who might not make as good of a decision as you would or who might just not care that much.
If you have questions about doing something, prepare a list to discuss them with your attorney. Get started and make an appointment with an attorney.
Dear friend, do yourself a favor and get it done. I worry about this for you, and if you do not want to do it for your family, then do it for me so I can stop worrying so much about you.
I just want the best for you and for your family to be protected.
– Ed
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