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Financial Literacy - Planning for your heirs
OVERVIEW
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

Make sure your will is legally valid
It's a waste to write a will only to have it rendered invalid in court.

Despite what you may have seen in the movies, you shouldn't make a videotaped will, or write it by hand.

"In about half the states, it's valid to hand write your will and just sign and date it and not have any witnesses if it's entirely in your handwriting, but that can be asking for trouble because it has to be verified after your death. It's much better to go through all the formalities and have two witnesses watch you sign your will and have them sign your will and then you're good to go," says Randolph.

Be safe and use a computer-printed or typewritten will and have it signed properly -- by signing it in the presence of two witnesses who then sign it in your presence and one another's. "There have been cases where somebody went out of the room to sign it. For example, they went into a sick room where this woman signed her will and then the witnesses withdrew politely to the next room to sign it and it was no good. States vary on that a little bit but you want to err on the side of caution," she says.

How often should I update a will?
Wills don't self-update, unfortunately. Review your will at least every few years or if you go through a divorce, marriage, childbirth or some other major life change, to see if you need to update it. You can update a will either by adding a codicil -- an amendment that you attach to the will -- or create a new will to replace the outdated one. An estate-planning attorney, software program or book can help you update your will.

Whatever you do, cautions Spencer, don't write any changes directly on the will, as crossing out something may inadvertently revoke your will.

In the end, it may be easier to draft a new will and destroy the old one, since codicils require the same execution requirements that a will does. "It's really just as easy to do that, especially if you're using a computer. You've got it stored already. You can just change what you want and print out a new one. Then you just have one will and people don't have to worry and interpret them against each other," says Randolph.

-- Posted: Nov. 19, 2007
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