Make a Will to Have the Last Word

by Dianne Molvig

Many of us put off writing a will. We tell ourselves we're not old enough or rich enough to need one. Or we figure a will is unnecessary because our family members will distribute our worldly possessions exactly as we'd wish anyway. Besides, we always can think of many other ways we'd rather spend our money than paying an attorney to draw up a will.

But perhaps the biggest reason we avoid thinking about a will is that it's a reminder of our mortality. Instead of looking upon a will as a downer, view it as a useful tool that allows you to spell out how you'd like certain matters to be handled after you're gone.

"What a will is designed to do is to make crucial decisions regarding your family and your property," says Ed Koren, a Tampa, Fla., attorney and certified public accountant.

Rest assured, those decisions will get made somehow, by someone. When you have a will, you're the one calling the shots.

Do you need a will?

To decide if you need a will, ask yourself what would happen if you were to die without one.

Say you have minor children. If you and your children's other parent die, and you have no will, the state decides who will raise your children. Do you want a judge to make that decision? Or would you rather make it yourself by naming a guardian for your children in your will? You also can name an alternate guardian as a backup, in case something happens to your first choice.

You'll also want a will if you have accumulated some assets, and you care who gets those assets after you die. If you have no will, a court decides how to distribute your assets according to state law, which may or may not match your preferences. The laws on inheritance vary from state to state.

On the other hand, say you're young, single, and own few possessions. You may not need a will yet, if the state will distribute your assets exactly as you would yourself. But perhaps you want to leave your car to your best friend, or your prized stamp collection to a favorite niece. A simple will ensures your wishes will be carried out.

Sorting out life's complications

In some circumstances, a will is essential to get desired results. Perhaps you're unmarried, but you have a long-term partner to whom you want to leave all or part of your assets. "If you have a significant relationship that falls short of marriage," Koren says, "you need a will because that 'significant other' will not be significant in the probate court" in all but a small number of states.

People who have remarried also are strong candidates for having a will. For instance, if you have children from a former marriage, you might want to leave a share of your assets to them. Or perhaps you have a family heirloom you want to pass on to your biological children rather than to your new spouse. Or you may want to leave assets to stepchildren you've not adopted, who otherwise would have no legal claim to inherit anything from you. You can address these and other family situations through a will.

Some assets, however, pass to heirs outside of a will. Life insurance proceeds and retirement account funds go to the people you designated as beneficiaries when you filled out the proper forms. Also, if you own property in joint tenancy with another person, he or she automatically inherits that property when you die.

A will has no impact on passing these sorts of assets, and that's a frequent source of confusion among consumers, according to Alan Orlowsky, an attorney in Northbrook, Ill. Many think a will is always the final word on asset distribution. But it's not.

Say you own property in joint tenancy with your brother, and in your will you leave all your assets to your spouse. People often mistakenly believe that in such a situation, your share of the joint tenancy property would go to the spouse, too.

"But it will go to your brother," Orlowsky explains, "because a will does not supersede a joint tenancy designation." Nor does a will supersede beneficiary designations for life insurance policies and retirement accounts.

What else does a will do?

Another important part of writing your will is naming your personal representative, or executor as it's called in some states. This is the person who will pay your bills and taxes and oversee distribution of your assets after you die.

If you have no will, the court names a personal representative to perform these tasks, and, again, the court's choice may not suit your preferences. If you have a will, you make this decision. And while you're at it, you can name a successor personal representative to assume these duties if the other person can't.

You also can use a will to set up a trust to provide for someone who depends on you. For instance, a trust could hold property for your minor children until they reach adulthood, or it could provide for the lifetime care of a disabled relative.

Besides a will, other important legal arrangements include a living will and durable powers of attorney for finances and health care (see sidebar below). In your estate planning, says Orlowsky, "A will is just a beginning point."

July 10, 2006