Writing a will used to be more expensive but with the ability to compare costs and services of estate planning attorneys, you have the potential to be a more informed consumer. Making decisions today about who you want to care for your children, how assets are to be distributed and circumventing possible tax issues are vastly important, but it does not have to be complicated.
A good place to start is by making lists:
- Make a list of your assets, including account numbers, phone numbers and where to locate the asset.
- Decide who gets what. If it is a retirement account or annuity, you can attach a beneficiary designation directly to the account or policy but remember, whatever the designation states is binding even if you name someone else in your will to receive that asset. Some states also provide for a Transfer on Death (TOD) or Payable on Death (POD) designation for non-retirement accounts. This means the asset transfers automatically upon death and avoids probate too!
- If you have children who are under 18, decide who you want to raise them in the event that you couldn't and discuss naming that person as guardian. Also choose someone to manage your children's property if you leave them assets.
- Decide who you want to serve as executor of your estate because every will has to name someone to carry out the terms of that will. Discuss this with them ahead of time to make sure it is something they are willing to do. Handling someones financial affairs can be daunting. If you do not name anyone, the court will appoint someone for you and it may not be a choice you would have made.
- Once you have made these kinds of decisions, you are ready to make your will! Having this information on paper ahead of time will help make the final process quick and efficient whether you use an attorney (which we suggest) or if you use a do-it-yourself software.
- Other important legal forms to complete are a health care proxy, living will, and power of attorney. A health care proxy is a legal document that allows you to appoint someone to make health care decisions for you should you be incapable; a living will or advance health care directive, contains written instructions that specifies what actions should or should not be taken regarding medical treatment if you are no longer able to make decisions; a power of attorney is written authorization for someone other than you, to act on your behalf in private, business and legal affairs with the same power as if you were acting on your own.
- We also suggest putting together a "treasure map" which identifies account numbers, phone numbers and where things are. A life insurance policy resting inside a safety deposit box that no one has access to or worse, no one knows exists, can have a devastating effect on your beneficiaries and loved ones. Let your executor, attorney or someone else you trust, know where everything is!
A will, power of attorney, living will and health care proxy are essential documents for all adults. Having these in place and updating especially after a life changing event (birth of a child, marriage, divorce, sale or purchase of property), is the right thing to do for you and your family.
So will you "will" or will you won't?
For additional information and some helpful checklists see what AARP has to say by clicking here: http://www.aarp.org/money/estate-planning.