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I'll focus on the basics in this article and the last two articles will
complete the series and discuss wills, living trusts, health directives
and health care durable power of attorney forms. I'm not an attorney or
expert in this area and am simply relaying what I know about these
complex issues and what references and software that I used to complete
my documents. If you have complex issues or extenuating circumstances in
your life see an attorney. They are experts in this field and can put
the final touches on your overall estate plan.
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Retiree
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The benefit of compiling all of the information I discussed in previous
articles is that whether or not you complete your wills and trusts using
software programs such as
Quicken WillMaker Plus
or Prepare your Legal Documents Online
, and the book
Planning Your Estate - what I used - or see an attorney you will still need all
of the information in the Survivor's Guide. It is also beneficial to understand
the basics of estate planning even if you get an attorney involved so you will
understand the concepts he or she will discuss with you and be able to make
informed decisions. It's like many things in life. We are often required to rely
on professionals for many things. However, a basic understanding is essential. A
good example is when my wife was diagnosed with glaucoma.. We researched the
disease online and in reference books so that we could help her doctor with
treatment. The more you know the better off you will be. I posted her glaucoma
treatment journal on our "Health Awareness Forum" to help others who have been
diagnosed with this disease.
Overview
Why do I need a will?..... If you want your assets to transfer to
individuals or organizations you need to have a will that specifies your wishes.
You must also have a will to assign guardianship for minor children and to
select an executor who will transfer your assets and administer the will. If you
die without a will the state you reside in will determine who gets what and when
and your entire estate goes through what is called probate. Probate is the
process used by the courts to distribute your property. Wills and trusts provide
the guidance needed to insure your THINGS go to whom you desire and living
trusts avoid probate so your assets can be distributed shortly after you die.
Often, Probate delays distribution of your assets for up to a year or more and
your estate will incur attorney fees that can be significant and are often
unnecessary if you transfer property through other means.
A will is an essential backup device to transfer any assets that are not
transferred by some other means such as "Pay on Death" or beneficiary
designations on accounts, living trusts, and all other residual estate assets.
They are also necessary to assign guardianship for minor children.
Before deciding what to put in your will you need to identify all of your
major assets and determine how they will be transferred. Go to
http://federalretirement.net/probate.htm and review the Asset Allocation sample
spreadsheet that I posted online. Read this online section to
understand the spreadsheet and the different asset transfer methods such as TOD
- Transfer on Death, POD - Pay on Death, Beneficiary, Joint Tenancy, and Trusts.
You can download a free blank spreadsheet to use for your personal assets.
Many estates simply require a will and to specify beneficiaries, POD or Joint
Tenancy designations for major assets such as savings accounts, certificates of
deposit, checking accounts, insurance policies, mutual funds, savings bonds,
stocks, the Thrift Plan, etc. Use the spreadsheet mentioned above to
identify your assets and how they will be transferred. If you assign TOD or
beneficiaries your major savings and assets will transfer out of probate and
often within several weeks to your heirs. All other assets will transfer through
a will and revocable trust if applicable. Mid sized to large estates may also
need living trusts to avoid probate and distribute assets.
Living trusts are also referred to as revocable trusts and are initiated
during your lifetime. They are not registered like a will and are simply several
sheets of paper instructing your executor how to transfer specific assets per
your wishes. Assets in living trusts avoid probate. They are simple to set up
and do not require additional or separate tax filings. You still own all of the
property of the trust as long as you live and you have the ability to amend it
as necessary to suit your needs. It is important to fund the trust after it is
executed and notarized. This means that you have to transfer the assets that
require registration such as mutual funds, stocks and bonds into the trusts
name. This is easy to do and brokerage houses and mutual fund companies will
send you the proper forms to use to change registration. You will name yourself
the trustee and you will receive the dividend payments and can buy and sell the
equity without limitations.
Subsequent articles will get into more details and will talk about health
directives in the final article of the series.
I used three valuable references for my estate plan and have mentioned them
many times in my articles. They have answered all of my questions and I was able
to do my estate plan without a visit to my attorney. However, there may be
issues in your life that will require a visit to your attorney such as having a
disabled dependent, certain business interests, etc. Even though I've done this
on my own I do intend to eventually see an attorney concerning certain issues
down the road. The three references I used are:
I keep the two books in my bookcase for reference and specify where they are
located in my Survivor's binder "Letter of Instruction." You can purchase these
references on my web site at discount prices. The books may also be available at
your local library.
Go to Part 10 - Wills
Go back to Part 8 - Wills. Trusts, & Health
Directives Overview
Back to article index
