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Financial Literacy - Planning for your heirs
See a pro for estate planning
Estate plans need professional evaluation, says this estate planning professor.
Planning for your heirs

Spotlight: Ted Kurlowicz

Mostly, you are working through referrals. More and more individuals have Web sites. If you're seeing a lot of things about corporate law or litigation, and then some little byline in there somewhere about wills and estate planning, you probably figure that's not their primary focus. All parts of the law have become niche planning. Obviously, with a big full-service firm, you're going to get somebody from their probate and estates department.

What preparations should be made before going to an attorney?

Plan for your heirs
Who needs estate planning?
What is de facto estate planning?
Who should evaluate an estate plan?
What does a will cover?
How much should a will cost?
When should people revisit their plan?

Understand the basics of what documents might be necessary and the types of questions that you're going to be asked to fill in on documents. Everybody probably would have already thought of the "who" questions -- the names and addresses of anybody who might be named and have a role in the estate plan, the ages of the children, the feelings of the estate owner toward the beneficiaries, the beneficiaries' capabilities of handling money directly, who might be an executor, who might be a trustee -- just getting a few basics like that really handles the entire fact finding in advance.

What does a will cover and what doesn't it cover?

A will covers things owned by an individual or anything made payable to the estate. So, if you designate (something as part of) the estate or a trust under the will, or designate the estate as the beneficiary of life insurance or a pension, it's covered under the will. Sometimes you'd do this, but ordinarily you wouldn't or you have probate. There's nothing else that gets distributed under the will. All those other things -- life insurance, pensions, IRAs, 401(k) plans, payable-at-death accounts -- are all distributed by contract to named beneficiaries. Joint property with rights of survivorship automatically goes to the joint tenant. A lot of times parents and grandparents will do this with bank accounts. They'll make (their children) joint owners, which has its own set of problems, and that's done often without any advice, and sometimes it's dangerous.

Anybody who hasn't taken a couple of semesters of estate planning and/or had a lot of years of experience wouldn't have any clue about this stuff. Only by accident could they get it right.

What was kind of interesting in the survey that you did was something like 14 percent wrote down their own will instructions. I've actually seen some Internet and some software packages that give people some good education, but 14 percent of people who had wills wrote them down themselves, at least with your respondents. That was pretty surprising. If I were in a foxhole in Afghanistan and heard someone yell "incoming," I might start scribbling a will down, but there's no reason for anyone else to be doing that.

-- Posted: Nov. 19, 2007
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