Everyone needs an estate plan, not just the super-wealthy. Estate planning is planning for the orderly distribution of your property to your heirs. But it encompasses much more. Estate planning has five major purposes, one or more of which will surely apply to you.
With a good estate plan you can:
1) Designate how your assets are to be distributed among beneficiaries after you die.
2) Avoid or minimize the delays and expense of probate.
3) Appoint a guardian for your minor children and a person to manage the children’s assets.
4) Provide for the possibility that you will become incapacitated and unable to manage your finances or make medical and other decisions for yourself.
5) Eliminate or minimize taxes.
What happens if you die without an estate plan?
If you die without an estate plan, the state will provide a plan for you. Every state has a law that specifies who gets your property if you die without a will or other documents for passing it. The law is a “one size fits all” plan that attempts to predict how most people would like their property distributed. Typically, your property would go partly to your spouse with the rest to your children in equal shares. If you don’t have a spouse or children, your property would go to other relatives such as parents or siblings.
This plan may not be suitable in many instances. For example, you may want to:
· Leave unequal shares to your children because they have different needs or you have already provided more help to one during your life.
· Ensure that property left to a spouse will go to your children from a different marriage on the spouse’s death, rather than to the spouse’s children or relatives.
· Disinherit a child.
· Leave your estate to a life partner to whom you are not married.
· Leave a gift to a grandchild, a more distant relative, or friend.
· Leave a contribution to charity.
The dangers of drafting your own estate plan.
The prevalence of do-it-yourself options for drafting estate planning documents leads many people to wonder whether they can prepare their own estate plans. For all but the simplest estates, writing your own estate plan is not a good idea.
These do-it-yourself forms, whether found in books or online, are generated by estate planning computer software that is designed to cover only the most basic of estate planning needs. Even books and programs about estate planning recommend that you seek the expertise of an experienced estate planning attorney.
Can I make a handwritten will?
The short answer to this question is, yes. Each state has different requirements pertaining to what is considered to be a valid will. So long as the requirements are met, a will will be considered valid even if it is handwritten. However, the safer practice is to have your attorney prepare a printed will that is then executed according to you state’s require- ments. You can be sure that a professionally drafted will disposes of your property in the way you intended and that it will be accepted by a probate court. A handwritten will may be more vulnerable to challenges.
What are the requirements for a legal will?
Each state has its own statute outlining what is needed for a legal will. However, in general a will is considered valid, regardless if it is a handwritten or computer generated document, so long as the following conditions are met:
The individual writing the will is of legal age;
The individual is of a sound mind, or has testamentary capacity. Essentially this means that a person understands that he or she is making a will and further understands the nature and extent of his or her estate and that he or she is disposing his or her assets upon death;
The individual’s intention is to make a will to dispose of his or her property;
The individual voluntarily signed the will, and was not under duress to do so;
The will properly disposed of the individual’s property; and
The will was signed, and dated in front of two disinterested witnesses. A disinterested witness is not listed in the will as a beneficiary. The witnesses also need to sign the will.
Who can make a will?
Any individual can make a will so long as he or she is of legal age (in most states 18 years of age) and is mentally competent. In other words, a person needs to know and understand that he or she is executing a will and making provisions to distribute his or her property to designated beneficiaries after his or her death.
Who can make a will?
No. Anyone can make a will (so long as they are of legal age and mentally competent.) The size of a person’s estate is not a factor in who is eligible to make a will.
It can be easy to put off estate planning until it is too late. No one likes to think about final goodbyes. You may feel comforted to know that your estate plan will be a lasting gift to your loved ones. It will ensure your assets pass to those you want to benefit with minimum cost and delay. It can protect you if you are incapacitated, ease the emotional burdens on your family, and give you great peace of mind.