How to Prepare a Will
What Happens If You Don't Have a Will?
Some people believe that it doesn't make any difference whether they have a will or not. Not so. If you don't have a legal will, the state where you are domiciled (i.e., the state in which you live most of the time, vote, have your driver's license) has one for you. The state legislators who drafted the laws of "intestacy" (laws for the distribution of the assets of those who die without a will) made general rules that apply to every situation, no matter what the personal wishes of the deceased.
Example: Jim, age 39, is killed in an auto accident, leaving his wife, Betty, and two minor children. He had no will, so under typical state laws, the house and the bank account go to Betty. Betty also gets one-half, and the children each get one-fourth, of stock that was in Jim's name. But, Betty will have to become the court-appointed guardian of the children and get the court's approval in order to use their shares of Jim's estate for their benefit.
The state's plan gives Jim's property to his family, but in a way that makes handling it unnecessarily complicated and expensive. Note that the state ignores any other beneficiaries, even charitable causes, Jim may have had in mind.
Planning for Your Will
Many people mistakenly believe they don't have enough assets to warrant making a will, believing that wills are only for the rich. Nothing is further from the truth. If you are married or single, if you have children and relatives, you need a will. If you have charitable causes you want to help perpetuate, you need a will. If you own a home or have a bank account, stocks or any other kind of property, you need a will.
Having your will prepared by an attorney and executed according to state guidelines is essential. Several steps are necessary for a will to be legal.
- It should be in writing
- It should be signed by the one creating the will
- It should be acknowledged to be the will of the person who signs it
- It should be dated
People who are not beneficiaries of the will must witness the signature of the one who creates the will. They, too, must sign it.
Make a List
Make a list of the things you value: real estate, life insurance policies, bank accounts, securities, bonds, mutual funds, significant items of personal property, mortgages, royalties, life interests in property, assignable income arrangements. List everything that has value or means something special to you or someone else. You want to present your attorney with a complete picture of your possessions.
Whom to Include in the Will
What you own is only half the equation: Its distribution at your death is the other half. Make a list of individuals you want to remember in your estate plan and will. Included may be your spouse, children, parents, siblings, other family members, and friends. List the institutions and organizations that you support now and wish to support after death. You may want to remember University Park United Methodist Church and its Foundation. What about your college? What about the special charitable organizations you believe in and support? Keep in mind that charitable institutions and the church cannot receive anything from your estate unless you specifically name them in your will.
Match Your Desires with Your Possessions
The objective in making a will is to match your assets, including property (both tangible and intangible), with the individuals and organizations that you care for and choose to remember. Note which items should go to which individuals. For instance, list the china you promised your daughter. Mention the special antique collection you promised to a faithful friend.
Outline all bequests. For instance, if a child or your spouse should receive an income for life, detail this so the attorney can draft a testamentary trust to accomplish the bequest. Many goals may be accomplished by using charitable arrangements such as trusts and annuities. By being included in a will, these arrangements benefit one or more individuals during their lifetimes and your charitable interests at a future time.
Four Ways You Can Give
There are four basic ways to give through your will. One of the best methods is a bequest based upon a percentage of your estate. This also provides a buffer against inflation. The most common method of giving through the will is a specific dollar amount. A bequest can give an individual, church, or institution specific personal property or real property. After all other bequests have been designated, what remains is residue. Be certain to designate how the residue will be distributed.
