By ELISABETH HALL, FINANCIAL PROFESSIONAL
As wives and mothers, we take on a lot of responsibility around the home. Many times, budgeting and the family’s finances are left up to us. While making sure that bills are paid and our daily lives are running smoothly is important, often times we forget about the need to have an updated will and living will. Meeting with an attorney to establish these documents is definitely time well spent. Here is a brief overview of what these documents are, and what they can mean to us and our families.
Why Write a Will?
A traditional will is a legal document that becomes public at the death of its maker. It names the executor of the deceased person’s estate, who will supervise the distribution of assets and the payment of expenses and debts through the estate. A person who dies without a written will is declared “intestate.” The court then names a personal representative for the estate, and state laws often determine how assets are distributed.
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Even if a will is hand-written (i.e., a “holographic will”), many probate courts will admit it and honor its requests. It is not a good idea, however, to rely on that kind of will. In addition, verbal wills have little standing in court, especially if they are challenged. To avoid disputes that can be costly and divisive for families, wills should be drafted by a competent attorney, witnessed and notarized. In addition to naming the executor, the will can serve several other purposes:
If an individual dies while responsible for minor children, the will specifies a choice of guardian.
The will provides instructions for financial assets that pass through its terms. Not all assets pass through a will. For example, most insurance benefits and retirement plan assets pass directly to a named beneficiary.
The will usually is the best instrument for dividing personal property among heirs, including homes, cars, furniture, and heirlooms.
The will can specify charitable gifts to be made post-death, or it can create a trust that takes effect at death to hold specific assets or properties. (A trust created by will is called a “testamentary trust.”)
The will can direct that specific debts, costs or taxes are to be paid from the estate, rather than from the bequests of heirs.
At least two copies of the written will should be made and stored in safe places that are known and accessible to the maker’s attorney, and the executor. Every will should be updated periodically to reflect changes in circumstances or wishes.
Most people who have large or complex estates prefer to pass the bulk of their assets through beneficiary designations or trusts, rather than wills. While a will is a public document, beneficiary designations and trusts generally are private. For example, any child of the deceased can see and challenge amounts left to others by will. However, terms of a trust usually can be shielded from everyone except the trustee and beneficiary.
Living Wills (Health Care Proxies)
In recent years, many people have become aware of the need to plan for the end of life. A living will (“health care proxy”) is a document in which a person expresses his or her wishes concerning the use of medical measures to prolong life in case of incapacitation. Typically, living wills are used to reject extraordinary measures, such as intravenous feeding and mechanical respirators, in cases when death appears imminent.
A living will is a statement that indicates what its maker wishes in such a situation. It often indicates “informed consent” to withhold food, water, or medications if they are used only to prolong terminal illness of an incapacitated individual. Family members and medical personnel may challenge a living will because of unclear or legally invalid instructions, concern over possible legal consequences, or the emotional difficulty involved in withholding treatment. Also, each state has different laws and regulations that determine the application of such wills, and some states consider the opinions of medical authorities on par with, or superior to, instructions in the will. Even so, most people feel that it is better to have a living will in place than no instructions at all. (Note: A number of states have now adopted the Uniform Rights of the Terminally Ill Act, which recognized declarations made via living wills as valid.)
In summary, writing a will and living will is perhaps the best (and simplest) way to begin focusing on estate planning goals and needs. It doesn’t take much time, isn’t complicated, and doesn’t cost very much. These two simple documents – in writing with notarized signatures – can legally assure that wishes of the maker are carried out and potentially save estates and heirs vast amounts of trouble and costs.
Elisabeth A. Hall Registered Representative, Park Avenue Securities, LLC (PAS), 350 Essjay Road, Suite 301, Williamsville, NY 14221. Securities products offered through PAS, 1-800-777-3411. PAS is an indirect, wholly-owned subsidiary of Guardian Life Insurance Company of America, (Guardian) New York, NY. Alliance Advisory Group, Inc. Is not an affiliate or subsidiary of PAS. Alliance Advisory Group, Inc. is not a Registered Investment Advisor. PAS is a member of FINRA, SIPC.
Guardian, its subsidiaries, agents or employees do not give tax or legal advice. You should consult your tax or legal advisor regarding your individual situation.