Preparing a Simple Will Inexpensively
Choosing a Legal Guardian for Your Children
Writing a Will
If Something Happens to You
Trust Basics for Retirees
Preparing a Cheap, Simple Will
I'm 40, my wife's 42, and we have a 6 yr. old son. Neither of us has a will. I'm looking to find out everything that needs done and the least expensive way to do it to ensure that our family is taken care of if either my wife or I pass on. We do have plenty of life insurance. We're not looking for an exotic will, just a "whoever's left gets everything" version.
Try a Paralegal
An inexpensive way to go about getting a simple will prepared is to hire a paralegal. A paralegal uses the same forms as an attorney but charges significantly less for their service. For example, a paralegal might charge $25, where a local attorney charges about $200 for the same paperwork! If you're looking for someone to actually prepare the will for you, then a paralegal would do it much cheaper than an attorney. Look in your local phone book under paralegals or legal assistance.
The main thing to know is that usually no matter where you live, everyone has a will (whether they know about it or not). If you haven't actually prepared your will, then the state technically has. Upon your death, usually the state takes over.
In any case, whether you decide to prepare your own documents or hire a paralegal to do it, it's usually best to at least call an attorney (one who specializes in this area) to get some legal advice, find out what your rights are, and what the guidelines are in your state. Even if you sit down for a consultation with an attorney (call around for ones that give free ones), and then go to a paralegal or prepare the paperwork yourself, you'll probably be a lot more confident about the whole process.
The greatest disservice this couple could do to their child is settling for a "Simple Will" or going the cheap route just for the sake of saving a few pennies. As a former Estate Planning Paralegal, I've seen some terrible results of this kind of estate planning.
Before signing anything, they need to consider the following:
- In most states, a simple will outline who gets what (i.e. whomever is left gets it). But what happens if both adults die at the same time - say in a car accident? Assuming the will dictates that the child gets everything, that child will get EVERYTHING at age 18. The average 18-year old cannot manage money and could easily blow everything the couple had save up -- plus life insurance etc. in one big spending spree. (I know of what I speak. My former husband died when his son was 16 year old. At 18, his son blew $15,000 life insurance proceeds in a matter of weeks.) Wouldn't a corvette be great at 18???
- What happens to the child if both parents die at the same time? A simple will does not have provisions for guardianship. Without legal provisions for guardianship, a family feud could result.
I STRONGLY suggest they speak with an attorney that specializes in Estate Planning. Depending upon the state, there are several options available to legally settle these issues. For example, a trust can specify at what age the child would get his/her inheritance (for example: 20% at age 20; 20% at age 30 etc.)
They also need to consider provisions for caring for the child in the event that they are not killed in the car accident, but are permanently disabled and unable to care for the child and are unable to communicate their wishes.
If you have a computer, a simple will can be produced with a number of "Lawyer-type" Programs. One I have used is "Quicken Family Lawyer". The program features hundreds of "legal templates" for any type of legal contract/document you may ever need or want, including wills and trusts. It walks you through an interview and explains step-by-step procedures on how to fill in the important parts of a will. There are simple instructions for every template and you always have a legal dictionary and legal guidebook available as on-line help. Once you have filled in all the required information, you can print it out with instructions on how to make it official/legal (notary signature, witnesses, etc depending on the document). Best of all, my local computer superstore, CompUSA, just had it on sale for $4.99 ($19.99 normally but there was a $5 instant rebate and a $10 mail-in rebate).
For more complicated documents, the program recommends consulting an attorney but for most documents, this step is not necessary.
Check Legal Assistance
Check with a local legal assistance organization or a family practice attorney. Some states have provisions for a "holographic will." This allows you to write your own will as long as the whole thing is in your own handwriting (nothing typewritten or computer generated at all) and is signed and dated. Sometimes the ones in kits at book stores don't meet your state's legal requirements, even if they are sold in your state.
Who's the Best Guardian?
Basically a family such as yours just needs to make sure the child is adequately looked after in case you both die and financial decisions are made in the event either one or both of you die.
For naming a guardian for your child make sure the couple you choose:
- Are people who you trust to raise your child in the manner you would.
- Are trustworthy with money. They will be required to give an accounting to the court on a regular basis.
- Share your views on religion if that is important to you
- Willing to be named as guardians. Do not just name someone without asking them first! They can refuse, then the court will appoint someone to do it and you may not like who the court appoints.
- Be a couple who is similar in age to you. Grandma and Grandpa are not a good idea.
You will need a Personal Representative, or in some states the term used is Executor. You will need separate wills. Usually the husband's will name the wife as the Personal Representative and vice versa. However, in the case you both die at the same time, you will both need to name a third party. Make sure that person is a good money manager. They will need to pay all funeral expenses, pay any outstanding bills, etc. Also, make sure that person is willing to act in this capacity. Ask them in advance. They, like a named guardian, can refuse to serve, in which case the court appoints someone you may not approve of.
My best advice of all is to talk to your Reference Librarian. He/she can help you find an easy-to-understand book on wills and estate planning. Also check with your life insurance company for ideas. Most will have booklets they would be happy to mail to you.
Recently, my father was working on writing a will. He advises that a will does not protect you from probate, and that it's better to make a living trust. He ended up making a living trust after reading a book (a self-help law kit with forms) from Sphinx Publishing, a division of Sourcebooks, Inc., titled "Living Trusts and Simple Ways to Avoid Probate" ($19.95). This book contains a form for writing a living will.
Obtaining a simple will and peace of mind is as simple as a phone call to your local senator. (Usually located in the government section of your phone book with a local phone number.) Your senator should have information about what's required in your state. In most states they'll have a booklet that contains info on personal records, health care directives, power of attorney for health care and organ donation forms. Filling this out is quick, easy and provides the assurance of having done something good to protect your love ones.
Passing Assets Outside of a Will
Depending on your state, a will may not be necessary. Your life insurance will be left to the beneficiary that you name. Your assets can also be placed in joint names including the name of your child. With mortgage insurance, and loan insurance, you home and auto would be paid for at death and would belong to whoever was still living and listed on the title.
You may want to look into setting up a trust as opposed to a will. That way the trust owns the assets and you designate yourself as the trustee and your child in the event of your death, or your spouse. My husband and I have a simple will set up through our attorney for a couple hundred dollars. It notes guardians for our children, (we have 4) and designates who is to take care of the business affairs if we should die together. It's quite simple, and considering it should be only a one time expense, not that expensive. It also includes designation as to who should decide how long one is sustained on life support. I believe this is a "living will." I'm not too good with the legal terminology, but I know rules vary from state to state.
Most of our things will pass on to our children without going through probate because a child or two shares "ownership." My mom is also joint on our checking account, so those funds are accessible in the event we both die together.
Editor's note: please remember that if you add a child (or anyone else) to your account, legally you've given them a portion of that money. If they get in debt or run into other financial troubles, creditors can legally demand payment from your account even if you had nothing to do with accumulating that debt.
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save! or No, debt is not a problem but I am trying to get ahead financially!
Editor's note: Do not to be 'too cheap' on your estate planning. If your situation is very simple you may be willing to risk Cousin Joe getting a little more (or less) than you had planned if the state steps in. But if you have children or more than just a few assets this probably isn't an area to skimp. You'll never find out if you've made a mistake, but your survivors could face a mess. Please remember, we are not qualified to give legal advice. This article is not meant to be legal advice. You need to be responsible in deciding whether your situation requires professional assistance. If there's a doubt in your mind, get professional help.