If I utter the phrase “Estate Planning” does it call anything to mind? Maybe you envision the little guy with the monocle from Monopoly, or picture some grand country property with manicured grounds, a butler, and an eight-car garage. But the reality is that estate planning is for all of us, not just the wealthy.
Of course, not even the wealthy always get it right, as the title of this article suggests (Go google “Prince Estate” and spend some time reading for some examples of why at least a basic Will is very important). But you really don’t have to be rich to have a need for doing some basic planning that can make the difference between having your wishes followed after you are gone, or leaving behind a tangled mess that can cause conflict, stress, and just plain work for your family.
The most fundamental document used in estate planning is the simple Will. This isn’t a complicated, or even expensive, piece of planning for you to take care of. It’s simply a document you sign that states how you want things to be taken care of after you die. This is where you’ll spell out who gets what, from the savings account to the silverware, and also directs who you want to take care of your children, if you have any. If you die before preparing this basic document, you are essentially asking your county’s probate judge to make these decisions for you. At best, it delays your heirs from being able to take care of your affairs, even things as simple as paying for your funeral can be delayed by a lack of planning. At worst, there is not agreement among your family members about what they interpret as your final wishes, and strife may ensue.
You can even prepare a will yourself. There are many software programs or DIY websites that can give you guidance. You can simply draft the document using the template language from these services, and then sign it in front of at least two witnesses. (They need to sign, too.) Some states will also require that the Will be notarized. Of course, if you aren’t confident in flying solo, you can probably get an attorney to draft one for you for a couple hundred bucks, depending on where you live.
One key component of a Will is to name your Executor. This is simply the person you are authorizing to see that your will is carried out after you are gone. The probate court will supervise this person in the execution of your will, including such things as paying your bills and dealing with debt collectors. Your Executor should be a living adult that you trust to handle your affairs. If your financial situation is simple, it can be a trusted friend, a spouse, or an adult child, but if your wishes are more complicated, consider naming your attorney as your executor.
Once you’ve completed and signed your Will, keep it in a safe place. A waterproof and fireproof safe in your house is a good option. If you’ve hired an attorney to draft the Will for you, often they will also offer to keep a copy on file. It’s best not to choose to keep your Will in a safe deposit box, since it can sometimes take a court order to be able to open your box after your death. It also makes sense to give a signed copy to your Executor, or, as mentioned, your attorney, just in case your copy is lost or destroyed.
Finally, remember that your Will is a living document. Make sure you pull it out, dust it off, and review it every once in a while. A good rule of thumb is to review it every two to three years, or during or after any major life events, such as a marriage, a divorce, or the birth of a child. Updating your Will is easy. Simply write a new one, or amend the existing one with a document known as a codicil. Like before, make sure your updates are signed, dated and witnessed.
Anyone can benefit from having a Will, and it doesn’t need to be a complicated or expensive process. If you haven’t yet taken the time to prepare yours, go do it now! If you have, maybe now is a good time to review.