How to Plan for your Will
Your will is one of the most powerful documents you can make while you’re still alive to ensure that your wishes for your estate are carried out when you’re dead. A very crucial element of estate planning, your will and testament is a legal and enforceable declaration of how you want your assets to be divided among your loved ones. Without a will, they are going to have difficulty getting the share you want them to get from your estate.
Unless you die testate—that is, you have left a legal and valid last will and testament—you are going to be subjecting your loved ones to a lot of painful and expensive surprises. When you die intestate or without a will, you are essentially letting the Federal and even the state governments have a say on how your assets get divided. You (you can’t do much when you’re already six feet under) or your family won’t have control over how your estate gets distributed. In addition, your heirs are also going to be hit with taxes left and right. They are not going to receive much from what you have worked so hard to leave them.
As you can see, you should put primary importance in creating your will. But before you can actually sit down and make one—or rather let your attorney make it for you—you should plan it carefully. Here are the most important things to consider when planning your will:
The value of your estate and the taxes it will incur upon your death. Dying can be an expensive business if you don’t plan for it in advance. The reason for this is because when you pass on, your estate is likely to pay Federal, state, and inheritance taxes depending on its value. To determine this, you will need to sit down with your financial adviser and/or your attorney so you will know what your estate’s tax exposure is. When you know in advance how much Uncle Sam is most likely going to extract from you, your estate planning professional can give you advice on what you can do to minimize it.
Your beneficiaries. A will is your way of taking care of the loved ones you have left behind. You should decide specifically who you want to include in your will. If you were fortunate enough to be married only once and have three lovely children then whom to include in your will becomes easier. But if you married more than once, have lots of children, want to include your parents, brothers, and sisters or exclude some of them from your will, then your work is going to be much more complicated. Your list should also include other individuals (not family members) who you want to bequeath some of your estate to. This can include maids or friends who have been faithful to you all these years.
Organizations or causes you want to take care of. Before you ask your attorney to prepare your will, you should also decide which organizations or foundations you want to give a portion of your assets to. If there is a cause you are passionate about and you want to ensure that they continue to do what you want them to do (find a cure for cancer, for example) even after you have gone, you should ensure that they are explicitly included in your will.
Types of Wills
There are different types of wills, although you are most likely familiar with and will most likely just use one kind—the simple will. However, it’s essential that you have an idea of what the others are in case your legal adviser will say that this type will better suit your situation.
The simple will is the typewritten or computerized (and printed, of course) will that stipulates your wishes. It states that the document is your last will and testament, introduces yourself and other personal information, the beneficiaries of your estate and what they can expect to receive, specifies the guardian of your children, and the executor or the person who is authorized to see to it that the stipulations in your will are carried out. To make your will legal and binding, you will need to sign it along with two other witnesses.
A joint will is another type of will that is also typewritten. Unlike a simple will, this expresses the wishes of you and your spouse and is usually considered as a contract between you and your spouse. This means that it cannot be changed if your husband or wife dies first—which is also its main drawback.
A holographic will is commonly known as a handwritten will. The good thing about preparing your own will by hand is that you don’t need a lawyer to make it valid. Its main disadvantage is that only a few states consider this type of will valid. If you intend to make a holographic will, make sure that you check with the laws in your state to ensure that it is legal and valid.
A spoken or nuncupative will is also another way to make your wishes known. It is convenient on your part since all you need to do is talk. It is also “more convincing” to your heirs since they actually see you on video giving the instructions. The problem with this kind of will is that there are many limitations attached to it. In some states, for example, you have to be at the brink of death so that your wishes in a nuncupative will are honored. In other states, there are limitations on the kinds of property that can be transferred and how much.
Contents of your Will
The contents of your will are its main meat. Your entire will and testament is actually comprised of clauses that have to be followed in the proper order, otherwise you will end up conveying the wrong message or not passing the test of validity and legality for it in your state.
The opening clause identifies the document as your will, introduces yourself as the maker of your will, other personal circumstances about yourself, and that you made the will without being coerced or forced. It also introduces your family members which you will be mentioning later in the will. In this part is also outlined your tax strategy which states how the estate taxes will be paid.
The main body of your will is your giving clause. This is where you specify who gets what in your estate. It can be general, which applies if you don’t have a lot to give and don’t have a lot of beneficiaries to leave your assets to. Or, it can be very specific. This applies if there are many foundations, charities, and people other than your direct family members who you want to include in your will. You might also want to be specific if you want to exclude other people from your will.
In the giving clause is also included the appointment clause which names the person you have chosen to manage your estate in the event of your death. You can give your representative powers that will supersede state regulations. For instance, you can assign your representative to run your business until such time that your children are already of legal age. This is what is called giving your representative fiduciary powers.
The last part of your will is, of course, the ending clause. This is where you date and sign your will. The ending clause will also state that you were not forced into signing your will and this will have to be attested to by at least two witnesses. You can also “self-prove” your will so that the validity of your signature does not have to be proven in probate. In this process, you and your witnesses sign an affidavit before a notary public. When you have a “self-proved” will, witnesses won’t have to be called again at probate just to prove that your signature is authentic.
Tips for Preparing your Will
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