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Financial Literacy - Planning for your heirs
What to know about wills
A will enables you to name a guardian who would rear your minor children if you and the other parent were to die.
Planning for your heirs

What you need to know about wills

Let's face it. No one likes to think about his or her own death. Yet it would be a shame not to prepare a will if you have young children or hold significant assets that you want distributed to specific people.

If you die without a will, your estate will be divided according to your state's intestacy statute, which may or may not coincide with the plan you had in mind.

"For example, most people assume that when a spouse dies the surviving spouse inherits everything, and that is not the case in any state," says Patti Spencer, an estate planning attorney in Lancaster, Pa. "In an intestate situation, the estate gets divided between the surviving spouse and children, and sometimes if there aren't any children, it gets divided between the surviving spouse and the decedent's parents. This is a nasty shock to a lot of surviving spouses to find out that they don't get control of everything."

What you need to know
Who needs to have a will?
Which assets does a will direct?
Do you need an attorney?
Make sure your will is valid
How often should I update a will?

Having a will also allows you to name a guardian who would rear your minor children if you and the other parent died.

"If you don't nominate someone in your will to be their guardian and to raise them, then a judge would have to make that decision without any input from you," says Mary Randolph, a legal editor at Needless to say, the person picked might not be the same one you would want in charge of your children.

Do you need a will?
Experts advise that anyone with significant assets or minor children should have a will.

In the event that you're young, single and without children, think about whether you have significant assets that you want particular people to inherit upon your death. If you want to leave your extensive gold jewelry collection to your best friend instead of your parents, you'd need a will for that.

Widows without children may also want to have a will.

"You might want to leave your estate to a charity -- or to someone who's not related to you -- and that's not going to happen unless you make a will," says Randolph.

Yet many assets will pass outside of a will.

-- Posted: Nov. 19, 2007
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