There are many reasons to rely on the aid of a professional to create your will; poorly drafted wills could leave your cherished possessions in unintended hands. Paying a lawyer to create a will can be expensive, however, especially if you factor in the ongoing costs associated with keeping your will up-to-date.
A lower cost alternative exists in the many online services that can generate a will for you. Some of these services provide a quality product, especially if your needs in an estate plan are simple. And provided you follow the formalities required by the laws of your state, an online service can be a way to obtain a more professionally created will for a lower cost.
There are still some advantages to hiring an attorney, of course. When you can meet with someone face-to-face, you have more of a guarantee that the professional will better understand your needs and expectations. Sometimes your estate plan can be better served with a different type of structure, such as with a living trust rather than a last will and testament.
Additionally, establishing a relationship with an attorney will make updating your estate plan easier, as you can return to the same practitioner. Many lawyers offer discounts for clients who retain their services for creating updated wills. And if things go wrong, an attorney’s malpractice insurance can help cover financial losses you face, while online services might only offer a money-back guarantee.
If you choose to create your will online, make sure that you take the time to familiarize yourself with the laws and requirements of the state you live in. You will want to feel comfortable with the will’s language and the effect it will have on your property distribution. Make sure the service you select is credible; ones that employ actual attorneys to review the documents before sending them to you are ideal.
Ensure that the company will provide you with the steps you must follow after the will has been created. If the will is signed or witnessed improperly, your will is at risk of being disregarded. Make sure the online service you choose will provide you with state-specific information about the number of witnesses you need, whether the witnesses must actually be present when you sign your will, and any other formalities you must follow to ensure proper execution of your will.
Making an inventory list before sitting down to draft your Last Will and Testament will help ensure you include all of your property in your estate plan. This inventory is nothing more than a list of your important possessions that you want to give away when you die.
For simplicity’s sake, you should limit your inventory list to only large, valuable, or sentimental items; small, personal belongings like clothes, pillows, or linens may be omitted unless you prefer to make a specific gift of the item. These personal belongings may be disposed of with what is called a residual clause, which specifies a recipient (or beneficiary) for anything you own that is not named in the will.
Any real estate you own, including buildings and land, should be listed individually in your inventory. Include an approximate value of each piece of property so that you better understand the value of each of the dispositions in your will. This helps you keep your gifts equal among your beneficiaries — if this is a goal of yours.
If any liabilities are attached to the property, list them as well. For instance, a mortgage, lien, or other long-term debt will diminish the value of the property. You should take this into account when deciding who should receive what.
Jewelry, Vehicles, and Other Valuable Personal Property
Anything that is valuable or carries sentimental weight should also be listed in your inventory. You may decide to bequeath all of your jewelry to one person, or you may give each piece to an individual beneficiary. Your decision on this will be reflected in your inventory list.
The same is also true of vehicles and anything else of value. Family heirlooms, even if they are not particularly expensive, should also be included. Remember that everything you don’t list will be included in your will’s residuary clause; if you want to have precise control over who receives a particular item, make sure it is included in your inventory.
Any checking, savings, or other money account becomes part of your estate just like any other property you own. Accounts with an already named beneficiary — such as a life insurance policy — will pass as a matter of law without needing to be included in your will. However, it may be a good idea to include these accounts on your inventory list for your own personal information.
An inventory of all your financial accounts will give you a clearer picture of how much cash you have to bequest. Mistakes in calculating your liquid wealth could result in you giving away too much money in your will, which means some intended beneficiaries may end up with nothing. Remember that your estate will also have to pay some administrative expenses, so leave some cushion in your calculations.
Stocks, bonds, and interests in businesses should also appear on your inventory. Your ownership in a business is also just property, and it will pass to a beneficiary in the same way. Some businesses may have restrictions on how you may pass your ownership interest at death, and you should examine the business’s relevant documents to see if there is a provision covering the death of a business owner.
Once you are confident all of your property has been listed, your inventory is complete. Use this document to help you organize your will, figure out your dispositions, and calculate the value of your estate. In some states, this inventory may be used as a Memorandum of Personal Property and be attached to your will to provide specific instructions for your bequests.
Your IRA (Individual Retirement Account) is limited in ways that a personal Revocable Living Trust wouldn’t be. A trust allows you to maintain a great deal of control over your assets and provide specific contingencies for the distributions, while an IRA is more limited in what personal solutions it offers.
One option is to name your trust as your IRA beneficiary. This will transfer the remainder of your IRA funds to your revocable living trust at death, subjecting these funds to whatever terms you created in your trust.
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An estate’s executor — the person responsible for administering the estate, also sometimes called the personal representative — is entitled to receive monetary compensation and reimbursement for any out-of-pocket expenses. There are some limitations to this, however, and the executor should not merely bill the estate for services; the probate court must approve any compensation or reimbursement requests.
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A note hastily written and left on your bedside table right before you pass away may be sufficient to act as a will, but not always. This type of will is known as a holographic will, and is accepted only in some states.
In order for holographic wills to be recognized in the states that allow them, three general requirements must be fulfilled: the will must clearly be intended as a final disposition of the individual’s assets, must be written entirely in the individual’s own handwriting, and must have evidence that the individual wrote the will (such as through witnesses or an expert in identifying handwriting). Other general will requirements also apply, such as the testator — the person writing the will — being of sound mind at the time of writing.
Continue Reading “Making Your Own Handwritten Will” »