Is it true that most people don't have wills? |
Yes, there have been published reports that as many as
70% of the more than 1.5 million who die each year in the
U.S.A. do not have valid wills. |
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Why don't more people have wills? |
Because they don't realize how important a will is. Some
think they don't own enough property to need one. Some believe
that life insurance or joint ownership arrangements are sufficient.
Some think their spouse inherits everything automatically.
But most simply keep putting it off until it's too late. |
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What happens when people die without wills? |
State laws of "descent and distribution" take
over. The laws vary from state to state |
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Aren't state laws adequate for most situations? |
No, because they are impersonal. They do not make exceptions.
They may deplete your estate unnecessarily by, for example,
requiring the court-appointed administrator to be bonded.
The laws are also written to predict your desires concerning
who should be your administrator, or who should be the guardian
of your surviving minor children. They cannot make charitable
bequests, only a personal will can do that. |
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How does "bonding" work? |
Many states require that estate administrators be bonded
to assure that they handle the estate honestly. It is a form
of insurance. The premium is taken from the estate and is
not refundable.
The cost of bonding is usually small, but why deplete the
estate at all if you don't believe a bond is necessary? A
simple statement in your will, naming your executor to serve
without bond, can waive the bonding requirements. |
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Does everyone have an "estate"? |
Yes, if they own anything at all. The term applies not
to just real estate but cash, cars, furniture books...any
property at all. |
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Doesn't joint ownership make a will unnecessary? |
No, that is a common misconception and it can be dangerous.
Creating joint ownership may not eliminate estate taxes and
may even cause the incurrence of gift taxes. It may also deny
you complete control over your property while you are still
living. Joint ownership is a poor substitute for a will. |
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Do young couples without children need wills? |
Yes. A will can sometimes cut probate costs and can waive
the bonding requirement. It can also name heirs in case both
husband and wife are in a common accident. |
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Should both husband and wife have wills? |
Yes. It is important that each has a will, even when the
two wills may be essentially the same. The wills should complement
each other and take into account any special bequests to other
family members. |
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What is the "unlimited marital deduction"? |
A husband or wife may leave all property to his or her
spouse and pay no federal estate taxes on the transfer. In
your will, you can take advantage of the marital deduction
and eliminate taxes in this manner. (Be sure to talk with
your attorney about other options available which might be
better for your situation.) |
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Do I really need a will if my estate is small? |
Yes, the smaller the estate, the more important that it
be settled quickly; delays usually mean more expense. Besides,
your estate may be larger than you realize. Don't make the
mistake of thinking of your property in terms of what it cost
originally. In many cases, its value may have increased substantially. |
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Can I write my own will, without hiring an attorney? |
You can, but it is not usually advisable. Many homemade
wills are declared invalid by the courts. There is no substitute
for the professional expertise of a competent attorney. |
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How much does it cost to have an attorney write my will? |
That depends on how simple or complicated the will is,
but wills usually are less costly than most people expect
and definitely less than the emotional and financial costs
of not having one. Ask your attorney in advance what it will
cost. It is a question that they answer routinely. |
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Can I do anything to reduce attorney fees? |
Yes, attorneys charge for their time and knowledge, so
the more time you can save them, the less the cost should
be. Jot down and take along all the basic information that
will be needed so you can avoid spending extra time in the
attorney's office.
Make a list of your property including life insurance. Name
your executor and alternate executor, and suggest a guardian
for your minor children, if any, as well as an alternate guardian.
List the charitable bequests you would like to make. Provide
any information about deceased children who left surviving
children. Take along your Social Security and Veteran's Administration
numbers and recent income tax records. Don't forget to include
your company pension and profit-sharing information. |
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Can I name my spouse as executor? |
You can. Or a close relative, friend, or trust department
of a bank or other corporation may be named. Ask your attorney
for advice. |
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Must I get advance permission from the executor before
naming him or her in my will? |
You should. It is not a legal requirement, but it is a
courtesy. The content of your will may dictate the qualifications
your executor should have. |
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Should my will direct what compensation my executor
is to receive for serving? |
It is not necessary to put it in the will because executors
are entitled to fees for their services. If the executor is
your spouse, a close relative, friend or beneficiary, he or
she may chose to waive such compensation. If your executor
is a trust company, a schedule of fees based on a percentage
of the estate will be used. The probate court will approve
the amount of the executor's or administrator's fee. |
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After agreeing to serve, can an executor later refuse? |
Yes, and this does occur for reasons of ill health, travel
or the press of other business. That is one reason it is wise
to name an alternate executor. |
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What happens if my executor dies before I do? |
The Court appoints an administrator who may not be the
one you would choose. That is why you should name an alternate
executor, preferably younger than you are. The trust department
of your bank may be your best choice to act as your executor,
as it would always be able to serve. |
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What does the executor do? |
- Obtains the death certificate and provides copies to your
insurance companies and the Social Security Office.
- Notifies banks where you have accounts or safe-deposit
boxes.
- Arranges for appraisal of your estate.
- Safeguards your property.
- Has your will probated.
- Locates witnesses, if necessary.
- Collects debts due your estate.
- Advertises for any just claims against your estate and
pays them in order of priority.
- Provides interim management for your business if necessary.
- Inspects and maintains your real estate.
- Collects rents if and when due.
- Completes and files federal and state inheritance and
income tax returns, as required by law, and in time to avoid
penalties
- Defends the estate against improper tax assessments.
- Determines whether to keep or sell your securities, to
continue or liquidate your business.
- Establishes any trust funds created by your will.
- Secures any payments due such trusts.
- Defends your will if challenged.
- Disposes of your property according to your instructions.
- Prepares final accounting and obtains receipts and releases
from heirs, if appropriate.
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Should I include funeral instructions in my will? |
It is usually better to leave separate instructions and
to tell your close relatives where to find them. |
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Is my will confidential or can anyone read it? |
It becomes a public document at death, available to anyone
who wishes to see it. |
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How much detail should a will contain regarding the
disposition of particular items? |
Enough to prevent misunderstandings among heirs, but not
in such detail that you may inadvertently disinherit some
heirs by disposing of property, before death, that is "given"
to them in your will. It is usually best to treat your property
generally and divide it by percentages among the heirs. Of
course, your decision will depend on what you are distributing. |
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How far should I go in my will in trying to foresee
future events? |
Think ahead on behalf of your heirs. Try to make bequests
appropriate to their future needs and family circumstances,
while leaving heirs free to use their inheritance as needed. |
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Should a trust be created in a will? |
One type of trust can relieve a surviving spouse of managing
investments. Another type can channel bequests to charitable
associations while providing your survivors with a life income.
You may be able to reduce (or practically eliminate) taxes
on both husband's and wife's estates through the use of two
trusts set up by will. Your attorney can give you more information
about trusts. |
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How do people usually make charitable bequests? |
Many simply designate a percentage of the estate to go
to one or more charitable organizations. Others name specific
property or a specific dollar amount. Still others name the
charity as the final beneficiary, to receive whatever remains
in the estate after other heirs are taken care of. |
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Is there a limit to how much I can give to charitable
institutions in my will? |
Yes, there are limits in some states. Ask your attorney
about this. |
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Should I tell a charitable institution that I have left
them a bequest? |
Yes. It can affect their planning, often in vital ways.
We are always grateful to learn of a bequest which has been
planned. And we are sometimes able to assist the person making
the gift by providing information about various ways to give
more economically. |
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Is there any danger that the charitable cause I name
may not receive my bequest? |
Yes, it sometimes happens, due to using an informal, unofficial
name for the charity in your will, especially since some nonprofit
organizations have similar names. Be sure to obtain and use
the full legal name and address of the institution. |
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How many witnesses does my will require? |
A handwritten will may or may not require witnesses, but
one or more are required for other wills in most states. State
laws differ on the required number of witnesses. Consult your
attorney to be sure your will is properly witnessed. |
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Must the witnesses be at least 21 years old? |
No. But a person must be competent to be a witness. It
is helpful if the witnesses are about the same age or younger
than the testator and well acquainted with the testator. |
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Must the witnesses sign in each other's presence? |
Yes, they usually must sign in the presence of the testator
and in the presence of each other. |
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Must the witnesses read the will and know its contents? |
No, they merely attest that you have said it is your will
and have it signed in their presence. |
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Is it legal for a witness to also be a beneficiary of
the will? |
Yes, but in some states said witness may not receive property
left to him or her unless there are other witnesses to prove
the will is authentic. |
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Once I have left a will, should I ever have to change
it? |
Probably, because even the best wills become outdated.
You should review your will periodically. Changes may be needed
if your marital status, financial status, or charitable interests
change. If you have more children, your designated executors
or guardians can't serve, or you acquire property in another
state, revisions may also be in order. Updating your will
may only require a simple codicil (amendment). |
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Am I required to change my will when moving to another
state? |
Most states recognize a will drafted in a state where you
resided (if properly executed in that state). But it is always
a good idea to have your will reviewed by an attorney in the
state of your new residence. |
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Once my will is completed, where should I keep it? |
Sign only one copy and keep it in your office, home or
bank safe-deposit box, or ask your attorney to keep it for
you. Retain an unsigned duplicate, so you can easily check
it periodically to see if it needs updating. |
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Is there anything else I need to know about wills? |
Probably. A list like this can only cover the main points.
Each person's circumstances and wishes are different - another
reason you should consult with an attorney about your will. |
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