Frequently Asked Questions About Wills, Living Wills and Powers of Attorney
WHAT DOES A WILL DO?
The best way to ensure that your money, property and personal items will be dispersed after your death according to your wishes is to make a will.
SO, WHO NEEDS A WILL?
Even though wills are pretty simple to make, around 50% Americans die without one (or Intestate). In the absense of a will, the court steps distributes your property according to state laws. Wills are not only for the rich folks; the amount of property you have doesn't matter. A will gaurantees what assets you do have will go to family members or other you designate. If youdon't have any apparent heirs and die without a will, it's quite possible that the state will claim your estate.
If you have young children, having a will is especially important not only because it gives you the opportunity to designate a guardian for them in the event of your death, without a will, the court will appoint a guardian for your children who may be someone you do not even know.
WHAT COMPRISES A WILL?
What you generally need to make a will:
1) Names and addresses of spouse, children and other beneficiaries, such as charities or friends;
2) Your name and place of residence;
3) Name and address of an Executor/ Executrix to manage your estate;
4) Alternate beneficiaries, in the event a beneficiary dies before you do;
5) Name and address of a guardian for your minor children;
6) Name and address of an alternative Executor/Executrix, in the event your first choice is unable or unwilling to act;
7) Name and address of a guardian for your minor children;
8) Name and address of an alternative guardian, in the event your first choice is unable or unwilling to act;
9) Any burial requests you may have (cremation, where you want to be buried, etc.);
10) The age you wish your minor children to have control of their inheritance;
11) Your signature;
11) Two Witnesses' signatures; and
12) Notarization.
Two important items that need to be included in your will are naming a guardian for minor children and naming an Executor/ Executrix.
WHAT IS A GUARDIAN?
A surviving parent assumes the role of sole guardian. Thaty being said, it's important to designate a guardian for minor children in your will just in case neither you or your spouse are able and willing to act. The guardian you elect should be over 18 and be willing and capable to assume the responsibility.Visit with the person before hand about what you are asking. You might name a couple as co-guardians, but that may not be the best route. It's always possible the guardians may choose to go their separate ways at some later date and a custody battle could ensue. If you don't name a guardian to take care for your children, a judge will most certainly appoint one, and it may not necessarily be someone you would have picked.
WHAT IS A EXECUTOR/EXECUTRIX AND WHAT DO THEY DO?
The Executor/Executrix is the individual who oversees the dispersement of your assets in according to your will. Most choose their spouse, an adult child, a relative, and/or a friend to fulfill this duty.
If no Executor/Executrix is specified in the will, a Probate Judge will appoint one. Probate means the legal procedure for the orderly distribution of property in the person's estate. The Executor/Executrix will file the will in probate court, wherein a Judge will decide if the will is valid. If it is valid, assets are dispersed according to the will. If the will is not found to be valid, assets are distributed in accordance with state laws.
Responsibilities usually undertaken by an Executor/Executrix include:
--Paying creditors;
--Paying any taxes owed;
--Notify Social Security and any other agencies and companies of your death;
--Cancel credit cards, magazine subscriptions, and the like; and
--Distribute assets according to the will.
WHAT ABOUT UPDATING MY WILL?
You will have to update your will multiple times during your life. Some examples would be, a change in marital status, a child's birth or moving to a new state should all prompt a review of your will. You can update your will by amending it by way of a Codicil or by drawing up a new one. Generally speaking, people can choose to issue a new will that overides the old document. Be sure you destroy the old will after you sign a new one.
WHAT ABOUT ESTATE TAXES?
The property included in your will may be subject to taxation. In planning your will, take into account the following:
---Federal estate taxes will likely be due if the net taxable estate is worth more than $1,000,000. This amount will gradually increase from $1,000,000 in 2002/2003 to $3,500,000 in 2009 so it will eventually shield $3,500,000 in estate or gift transfers from tax per taxpayer. Estates in excess of the exempt limit can be taxed at a rate from 37% to 50% (the top percentage is scheduled to gradually decrease to 45% in 2009). Be sure to note that estate tax changes are scheduled to be removed in 2010. If not extended, the tax law will revert to the estate and gift tax provisions in affect in 2001. You should consult a tax or financial professional to see what plan is right for you and your family.
---State death or inheritance taxes
---Federal income taxes
---State income taxes
You may be able to reduce your estate tax by giving gifts or establishing a trust during your lifetime. You can also cover the cost of estate taxes by purchasing a life insurance policy intended to pay taxes. Talk with your life insurance agent to find out more about how this works.
WHERE SHOULD I KEEP MY WILL?
Upon writing your will, keep it in a safe place that is accessible to others after you die. One suggestion would be that you keep it in a fire proof box that you can buy at any office supply store. I don't suggest that your will be kept in a safe deposit box because many states will seal your safe deposit box upon your death. Make sure a someone you trust or relative knows where to find your will.
WHAT IS A LIVING WILL?
It is a separate document that lets your family members know what type of care you do or don't want to receive should you become terminally ill or permanently unconscious. A living will is not a part of your will. It only becomes effective when you cannot express your wishes yourself. Discuss your your living will with family members, and make certain all of your doctors have a signed copy.
HEALTH CARE PROXY: WHAT IS A POWER OF ATTORNEY FOR HEALTH CARE?
A health care proxy, or power of attorney for health care, is not a part of your will. It is an individual document that authorizes anyone you name to act in agreement with your medical intentions. It only becomes effective when you cannot express your wishes yourself. Once again, make sure that all your doctors have a signed copy.
FINANCIAL DURABLE POWER OF ATTORNEY: WHAT IS IT?
It is a separate document that authorizes someone you name to act in accordance with your financial intentions. A financial durable power of attorney is not a part of your will. . It only becomes effective when you cannot express your wishes yourself. You should make sure all financial professionals and banks have a signed copy.
PLAN AHEAD
The end of your life is not something you want to dwell on, but being prepared for what will happen to your family and your assets and personal items is very important. Once your will is drafted, you won't have to think about it again unless something significant in your life changes.
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About The Author, Dennis Frank is an Internet Entrepreneur and Author of many fine websites such as LivingWill4U.net Please visit the website for more related articles and information about Living Wills. You may use this article on your own website if you leave this author credit in place.
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