The only downside of a will — regardless of your age — is not having one
Estate planning is one of those things everybody knows they should do, but a surprising number of people put it off until it’s too late, or do it wrong in the first place.
Too many people of all ages hesitate to have wills drawn up. There is no good reason to do that. If you die without a will, you will have lost the right to specify who inherits your property. In this situation, the state decides how your property will be distributed, and it is unlikely the allocation will match your preference. Moreover, in many states, the law will allocate your property in a way that may be not be fair to your spouse.
Some individuals feel that because they are married and own their property jointly, there is no need for a will. What if you and your spouse die together in an accident? Who will receive your property? If you have young children, who will become their guardian? If your young children inherit property, who will manage it?
It is important to know what property passes by will, and what does not. Any property owned with “rights of survivorship’’ goes to the other owner(s). Property with a named beneficiary goes to the party named. Any property disposed of by contract goes to the named owner(s). The provisions of your will do not override the preceding specifications. Any property you own individually that does not have a named beneficiary passes by will. Your will can also cover property you may not be aware of. For example, if you receive an inheritance or a legal settlement, the provisions of your will can address these assets.
Many advertisements suggest you can avoid legal fees by purchasing books, legal forms, or computer programs to create your will. In my opinion, that is foolish. If any mistakes are made, the will can be disallowed. A straightforward will is not expensive, and many attorneys won’t charge for an initial meeting. Reputable attorneys will provide you with a cost estimate after you provide basic information.
A will needs to be precise in many ways. An attorney can help you specify key provisions, such as who will receive what property; how you should hold your property; trust agreements; the best way to name beneficiaries of your retirement plans; maintaining consistency with named beneficiaries and contracts specified in other documents; minimizing any federal estate tax; and naming an executor and guardians. Make sure to select an attorney with expertise in this field.
You must update your will when circumstances change: a move to a new state, additions to the family, deaths in the family, a divorce, or new assets as a result of retirement.
If you have significant retirement assets such as IRAs and 401(k)s, it is important to select beneficiaries and withdrawal options with care. I recommend the books written by Ed Slott to help you understand these issues.
Elliot Raphaelson can be reached at email@example.com.