April 26, 2006
A well-drafted Will or estate plan is a small investment that can prevent enormous heartaches and headaches for your family.
When a person dies, everything he or she owns or controls changes hands. This process can be smooth and easy, with a minimum of taxes, or it can be emotionally and legally difficult for everyone involved. A good Will or estate plan can help avoid heartaches and headaches for surviving family members.
Why You Need a Will
The primary purpose of a Will is to outline the distribution of the estate:
who is entitled to certain assets and when are they distributed? However,
a well-drafted Will also allows a person to:
- Distribute assets to heirs in the manner and time you choose;
- Appoint the executor, who carries out your wishes as defined by the Will;
- Appoint a guardian of minor children until they reach legal age;
- Appoint a trust to manage any assets being held for a minor, disabled beneficiary, or for later distribution to heirs;
- Make specific bequests to individuals and/or charitable institutions;
- Provide for the payment of death, income, and other taxes; and
- Maximize death tax savings.
When a person dies without a Will (known as dying intestate), state law governs how the estate is distributed. Frequently, the state's formulas are quite different from what an individual would have wanted. For example, state law gives priority to certain persons to serve as executor, often appointing someone the decedent would not have chosen. Having a Will gives a person greater control over their estate when they are gone.
Planning a Will
Wills can be simple or complex. In either case, they should be drawn by an attorney experienced in estate planning so that the document conforms with state law and the words used in the document reflect your exact intentions. Although handwritten Wills are accepted in Pennsylvania, it is generally unwise to write your own Will for the same reason that you would not perform your own surgery or prescribe medicine for yourself.
Remember, your life's work is at stake as well as the future of your family and loved ones – all of which are worth far more than the relatively small expense of hiring an experienced professional to help draft the document. A properly drafted Will can also protect assets in your estate from unnecessary taxation.
In order to begin planning your Will, make a list of all of your assets and how each asset is titled (individual, joint, etc.). Also list the beneficiary designations on all of your life insurance and retirement benefits. You may also want to consider a trust designed to hold assets until your beneficiaries reach a certain age or are free from a disability. There are many issues to be considered when a trust is created, including the choice of a qualified Trustee who will manage, invest, and distribute trust assets. Keep in mind – you need not be wealthy to benefit from a trust today.
It is also wise to periodically review and update your Will to be sure it reflects your current intentions.
Take the time now to have a well-drafted Will or estate plan drawn. It is a small investment that can prevent uncertainty and avoid enormous difficulties for your family – and can instead be a source of comfort and help to those you love – and yourself.
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