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Should you have a will?

Despite advances in medical technology, the mortality rate for humans remains stubbornly fixed at 100 percent. So why is it that millions of Americans still die without a valid will?

Everyone needs a will. The primary purpose of a will is to ensure that your assets are distributed to whomever you choose in the amount and manner that you choose. Other functions include assigning guardianship to minors and appointing an executor to dole out your stuff.

Suppose you die in a car wreck caused by a drunk driver. Even if you have no assets, your estate might have a wrongful death suit that produces millions of dollars in costs, all of which will be divvied up by the state if there's no will.

Dying intestate also triggers a little-known hassle in the form of an administrative bond. When someone dies without appointing an executor, the court appoints an administrator to disburse all property that wasn't jointly owned with a survivor. The administrator must post a bond to ensure that he doesn't loot the estate and vanish. The cost of that bond, usually about $100 per year for every $100,000 in the estate, is paid by the estate's assets.

In general, a will must be signed in the presence of two witnesses to be legal (as do "codicils," or subsequent changes). Handwritten wills, known as "holographs," are legal in about half the states.

But a higher quality will isn't that pricey. An attorney will usually do a bare-bones "simple will" for less than $100. A simple will means no trusts and an estate value that falls under a specific exclusion amount. The federal estate tax exemption is set at $5 million per person, indexed each year for inflation. In 2013, that means that each individual can exclude up to $5.25 million from estate taxes, with anything above that amount taxed at 40 percent.

And while you're talking with your attorney, it's a smart idea to discuss related issues -- power of attorney in the event you are disabled but not dead, a living will to deal with heroic medical efforts.

Those with substantial estates (at least $250,000 or so) might consider establishing a living trust. A trust is simply an agreement between the grantor (the person who establishes and funds it) and the trustee, who administers it. When someone with a living trust dies, he can leave all his assets to the trust, which can then be doled out by the trustee. This escapes the attorney's fees for handling the probate process (probate simply means "presenting the will" to the court, and the fee is usually about 2 percent to 3 percent of the estate).

Mark C. White, an attorney in Cleveland who specializes in estate law, emphasizes the importance of a living will in today's medical climate. "In the past, people tended to just die. Now, people live for years, but are unable to make competent decisions. Lawyers make money off these people. I've had guardianships where I've made money for years that the relatives wouldn't have to pay had they established each other as nominated power of attorney. Because the judge has to approve every little thing -- a stock sale or if the house needs to be sold."

White says that anyone who may end up in charge of their parents' assets should they become disabled should seek a power of attorney provision. "Power of attorney isn't foolproof, but it can save a pile and is almost as important as a will."

If you choose to prepare your own, make use of several good do-it-yourself will-maker kits, both in print and electronic versions, the best of which are sold by legal publisher Nolo. Not surprisingly, estate lawyers tend to recommend professional legal help, and their case isn't without merit. White points out that the kits only help with those questions the filer knows to ask. Stuff like durable power of attorney is critical in today's era of people living for decades without the faculties to make financial decisions for themselves. And every estate lawyer in the land has horror stories of survivors who suddenly found themselves in estate-bleeding battles with long-lost relatives. So use the kits if you like, but don't automatically think that certain facets don't apply to you.

One last common error: Use a separate document for special burial instructions. Estate attorneys all have clients who buried their parents only to open the will a few days later and discover a desire to be cremated.

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