Write Your Will…Now — Heir apparent?

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March 2012 View more

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Mortality is a hard pill to swallow. Though research figures vary, estimates show that between 55 and 70 percent of American adults do not have a last will and testament. For some it’s a potentially emotional event, for others an expense they can forego “until later.” But later either never comes or comes too late.

Writing a proper will is one of those essential preparedness events that should not be pushed off, and a fairly uncomplicated will should not break the bank.

Ron Nyberg, partner, Nyberg & Cassioppi, LLC, says that generally the cost of a basic estate plan for an individual—a will along with powers of attorney for health care and financial matters—will be less than $1,000, increasing commensurately with the amount of assets and complexity of the planning involved.

Know that absent a will, your wishes are clearly at the mercy of the court, which becomes the final arbiter of who gets what. Inevitably, family disagreements ensue over both monetary assets and the smallest family heirloom.

If hard feelings are not troubling enough, consider the more dire consequence of foregoing a will: The court, not you, is empowered to determine who will look after your children. Each of three Naperville attorneys agreed that preparing for the future of dependents is one key reason to write a will. “Why Every Parent Needs a Will”—at www.BabyCenter.com—gives an excellent overview of this complex legal subject.

What about opting for one of many available online fill-in-the-blank will solutions? Dick Kuhn, founding partner of Kuhn & Heap, says that individuals who start the estate planning process attempting to adopt “Internet wills” may be better educated about the issues that ultimately need to be discussed with an attorney. However, Internet wills “are creating so many situations that have to be ‘cleaned up’ by an attorney—hopefully during the person’s life—because things are often much messier with Internet wills after one dies.”

“Individuals who use online will services run a significant risk of unintended consequences,” Nyberg adds, “as online wills, at best, may fail to provide even the most basic provisions that should be incorporated or, at worst, fail to meet the necessary legal requirements of a valid will.”

Thus, don’t assume that writing a will is easy, or that a will in and of itself avoids the feared probate process. Most of us have little experience with the process and practice of wills and what they can and cannot provide.

For example, Barry Greenberg of The Greenberg Law Firm, notes that if your current designations name your “estate” as beneficiary, even non-probate assets may become subject to probate and unfavorable income tax treatment.

To top it off, in Illinois, if an individual dies owning more than $100,000 and there is no joint tenancy or beneficiary, the executor must go through the probate process to clear title to those assets before distributing them to beneficiaries or heirs.

Thus, says Kuhn, the best way to avoid probate “is to adopt a living trust, which is similar to a person having their own company that does not ‘die’ and, therefore, requires no probate when the person dies.”

In the end, no two estate plans are identical, and changing state, federal, and tax laws can complicate the process. According to Nyberg, “Estate planning is a highly personal exercise that can involve such questions as how to best provide for my spouse, children and other family members, what are the best ways to give money to charity, what can I do to eliminate or reduce estate taxes, and how can I transfer my values and dreams to my heirs.”