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How to plan a will

Before their courtship, both Marty and Carol Redman of San Diego could have posed for postage stamps representing self-sufficient young Americans. Each was college-educated, self-supporting and solidly employed -- Marty, 35, as a mechanical engineer, and Carol, 32, as a laboratory technologist. Neither had much need for anything as somber as a Last Will and Testament. Even after they married in 1995, when estate planning was occasionally served up as a dinner table topic, the whole death-will-inheritance thing didn't seem to be a big priority.

That is, until Nathan James came along. When baby made three earlier this year, the estate planning picture was reframed for the Redmans. Suddenly, having wills drawn up took on new urgency.

"Marty and I were both independent before we got married, so it wasn't like we wouldn't survive financially (if the other died)," says Carol, who is now a full-time mom. "But now we've got this totally dependent little guy, and we have to make sure he's taken care of."

Big changes like birth, death and significant illness are almost always the precipitators of the will-writing process, says Maryland attorney Bill Dale. Upcoming surgery or a trip which parents take without the kids can also get the ink flowing. But while estate planning awareness levels may ebb and flow with the tides of life, the four reasons for having death-related planning documents never change.

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So should I have a will or not?

According to Dale, you should have a will for the following reasons:

  • You have minor children. Anyone with minor children should draft a careful will or trust that details not only distribution of assets, but also guardianship. According to Dale, court proceedings and disputes related to children of parents who die intestate can be heart-wrenching -- and an unnecessary albatross for kids already dealing with grief. Court-appointed guardians must often negotiate legal labyrinths every time a decision is made regarding the orphaned kids. But a guardian appointed in a parent's will can help smooth turbulent waters for the children, making decisions in the same way a parent would have.

  • You want to control how your assets are to be distributed. For those dying without a will, statutes vary from state to state as to how assets will be distributed. But one thing is certain: The state's desires for your worldly goods may not be the same as yours. Taking the time to write a will helps keep your wealth where you want it.

  • Any of your assets are to be left to a minor, an individual under a disability, or an individual whom you wish to benefit from your assets without specific financial control. In many cases, passing outright ownership of assets is not a good idea. The obvious case in point is bequeathing assets to minor children. But other examples include bequeathing assets to someone mentally incapable of administering their own financial affairs, or passing the benefits of assets to a spouse without those assets becoming part of the spouse's estate, and thus subject to certain estate taxes.

  • You have tax planning objectives. According to Dale, simple will and trust techniques can protect more of your assets from the tax man. This is especially critical when net assets exceed $600,000 (including life insurance benefits), in which case Uncle Sam's cut exceeds one-third or more.

Now the above four reasons for writing a will aren't exactly brain surgery. So why do even knowledgeable people put off drafting one? According to Dale, the main reason is as old as Adam: the unpleasant prospect of death itself.

"Most people don't like dealing with the issue of their own mortality," he says. "And it's an issue that never seems to have current urgency." It's only when a death in the family, or some other major event, hurtles over the horizon that most people are jolted into putting their own affairs in order, Dale says.

So what's the first step to take when you are ready to acknowledge your own finitude? Pick up the phone and call a lawyer. Dale recommends hiring an attorney -- preferably one with estate planning experience -- referred by someone you know and trust.

"Picking an attorney out of the Yellow Pages isn't a good idea," Dale says, pointing out that while every attorney will say they draft wills, many are not experienced enough to identify and navigate more complex estate planning issues.

Marty and Carol Redman's parents referred their attorney. Accountants and financial planners, who regularly deal with lawyers, may also be a good referral source.

Another option for drafting a will is off-the-shelf will-writing software. But Dale offers this caveat for computer-generated testaments: While software can create a useful document in a reasonably large percentage of cases, some people's heirs may suffer the consequences of misplaced frugality.

"If I have a hangnail, I diagnose it myself," says Dale. "If I think it's a cardiac problem, I see a doctor."

There's a good chance that money invested in an attorney-drafted will will seem like small change compared to what a do-it-yourself document could cost your heirs.


-- Posted: Oct. 23, 1998

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See Also
It's never too early to make a living will
Personal trusts growing in popularity
Factors to consider when selecting a trustee
Financial advice glossary
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