Mrs. Micah has tagged several Personal Finance Bloggers with a challenge:
Find one step you can take to make your financial system better or more organized.
My choice: rewrite my Will.
I have to admit that I haven’t thought much about writing a Will for 10 years or more, though I DO have one. I wrote it back in 1996, before we had my son. Even though it does make a cryptic reference to “additional children” I may have after writing it, I think it would be a blow to my son’s psyche to not be mentioned in his father’s Will…should something happen.
The reasons for writing a Will are many, though some may be personal rather than practical, but here you go:
1. To create a plan for the care of my children should my wife AND I die before they are of legal age.
When you have a Will, you’re the one who decides the people that will complete the raising of your children. Without a Will, a court decides. While in most cases, the court makes a good decision, I don’t want my children to think that I was too lazy to think about how they should be cared for. Their care should not be left to chance.
2. Having a Will preserves my assets for use by my chosen beneficiaries. Without a Will, my assets could be divided by a court without regard to my wishes. I’d like my wife, my son, my daughters, and other family members to receive specific items of my choosing.
Should you want to leave your estate to your favorite nephew, you’d better have a Will, otherwise your ex-spouse might petition the court and receive it! Even if your estate is small, a court will determine the distribution of your assets. The probate court uses a pre-determined legal formula to decide who gets what and how much. You should not leave the fate of your life-long work to chance. Take control of what happens with your estate by writing your Will.
3. By writing a Will, I can minimize estate taxes.
Federal and State estate taxes will consume a large portion of any money you leave behind. Die without a Will and your heirs could lose even more because of the legal fees associated with dying intestate. Surely you didn’t work all those years to benefit the government and a pack of lawyers, so write a Will. Though you can’t totally avoid all death taxes, you can minimize them by granting gifts to individuals or putting money into a trust; these are legitimate means to reduce your “taxable estate”. Rich people do this, why not you?
4. A Will can help keep the peace after I’m gone. Estate attorneys and probate judges testify that when grief and stress are combined with a death in the family, conflict often arises. A properly written and recorded Will leaves no room for controversy.
5. It’s the responsible, mature thing to do.
I want to set a proper example for my children. Writing a new Will will allow me to achieve a feeling of well being and a general sense of security knowing there is a plan in place for my family in case anything should happen.
Though writing a will is fairly simple, I’ll need to include all the necessary details to make certain it will hold up in court.
I’ll have to make sure my Will is valid legally. Generally, only those over the age of 18 can write a Will and this person must be “of sound mind” as the old saying goes (my qualifications on this point are shaky sometimes!). I’ll need to make sure it’s witnessed, preferably by three people who sign, date, and list their home addresses. The witnesses shouldn’t be beneficiaries of my Will. I plan to have mine notarized. Additionally, a specific provision must be included stating the purposes of each section of the Will (guardianship, property disbursement, or both). I’ll also have to name an executor, or person responsible to see that the Will is carried out.
When it comes to selecting an executor, though it is often a spouse, adult child, relative, trust company, or an attorney, it should be someone who can put emotions aside to handle the business at hand. Executor are responsible to pay off and remaining debt, notify various agencies of the death, cancel credit cards, subscriptions, and other services. If no executor is named, the probate judge will appoint one.
I’ll need to include a current inventory of my financial assets, along with real estate, heirlooms, and other things I consider valuable. I’ll give some specific instructions on how I want certain items distributed. But Wills aren’t the place for conditions. “‘I leave my wife the bulk of my estate so long as she doesn’t marry [insert name]” won’t cut it. That’s a litigation contest just waiting to happen and I’m writing a Will to cut down on family strife.
If I want to list conditions, I would need to create a trust. And that’s an entirely different matter.
A Will must be safely stored since it’s worthless if no one can find it. I plan to keep mine in my safe deposit box at the bank since we keep the majority of all important legal papers there. But I have found out that safe deposit boxes aren’t always best because some states order the boxes sealed upon the holder’s death. I’ll probably leave a copy with my attorney just to be safe.
Finally, I’ll need to keep my Will up to date and current. As my family and my assets change, so should my Will. I can update my Will by adding a codicil or by writing a new one entirely. A new codicil or will must be legally signed and witnessed and the old Will should be destroyed to avoid confusion.
A Will is just our final word on who and what we cared about. It allows us the final say on how we wish the people, the assets, and the causes that were important in our lives to be protected after we’re gone.
Others who are participating in the Small Step Challenge:
David at My Two Dollars plans to pay off his remaining medical debt.
Gibble at Gather Little By Little plans to update his budget.
Plonkee plans to update the insurance on the house.
Listing personal debts is what’s on tap at at The Dangling Conversation.
We Like Money is up for the challenge and plans to straighten out the IRA.
The Mighty Bargain Hunter wants to go paperless.
PT at PT Money will organize those Finances.
At Green Panda Treehouse some budgeting will be going on.
Pinyo plans to do some estate planning.