I mentioned in my last article that I would be writing a series of the pieces of an estate planning. Last month we discussed the Memorandum of Personal Property. This is an attachment to your Will that allows you to direct whomever you wish to receive certain pieces of personal property.
Since the document is tied to your Will, let’s cover the Last Will and Testament.
The Last Will and Testament is considered the keystone of the arch in an estate plan. It is probably the most popular estate planning tool and can be the only document in an estate plan. It can be all of the instruction you need if you have modest means and a “normal” family.
Most writers agree that every adult should have a Will. Even though most assets pass under terms of an inter vivos trust, by beneficiary designation, or by joint tenant, a Will can control the disposition of assets that are not actually controlled or effectively disposed of by other will substitutes.
A Will has certain functions that no other document has:
Control of the disposition for your spouse, effectively disinheriting your children until the surviving spouse dies;
Appoint guardians of the person and estate of minor children;
Useful for disposing of life insurance benefits when the beneficiary does not survive the policy owner;
Directs the payment of bills and expenses of the decedents;
Identifies the executor – the person the Creator directed to take care of their final matters;
Can create the Power of Appointment which allows the decedent to control other assets that may have been inherited from someone else (this is a topic of its own?)
Creates an outline for simultaneous death or require a beneficiary to survive the Creator for a limited time period. The assumption that someone died first, so their inheritance is lost, is not always a correct assumption;
Can create income and transfer tax (estate) savings by providing the survivors with limited interest in the testamentary trusts created for their benefit;
I went to a number of “free will” websites. They provide you with a blank document and you just fill in the names of your spouse, your kids and a couple of lines for the disposition of personal property. They do not appoint guardians for minor children, so if your kids inherit anything, their 18th birthday is AWESOME! They get it all.
I hate those commercials that discuss the paths of dysfunction in life if you don’t have the righ carrier. But failing to have a Will to protect your family and your assets could have some of the same end results. “Don’t let your kids get punched in the gut because you didn’t have a Will”.
And please, don’t use a “fill in the blank” Will. They work best only while youre living.