Physician's Money Digest
Where there's a will, there's a way. Part of the problem,however, is that the majority of Americans do not have awill. According to a recent survey conducted by FindLaw.com,a Web site providing information about the legal system, morethan 57% of Americans do not have a will. According tonumerous surveys, doctors have aneven worse record of will neglect.
New York Times
That's certainly cause for concern. As a report points out, failing to make estate planning decisionswhile you are alive and well can result in costly and stressfulsituations for your heirs.
For the approximately 43% of Americans who have awill, it's important to remember that a will is just the firststep when it comes to telling your heirs the "what, why, andwhere" of your wishes. The more specific the instructionsyou can provide, the better.
Plan and Anticipate
Similar to purchasing life insurance, drafting a will is somethingpeople tend to avoid because it forces them to deal withan unpleasant circumstance: their own demise. Yet, failing todraft a will can create major complications for your family.
According to the article, if a person dies without awill, an administrator is appointed by the court to resolve theindividual's financial affairs. Of course, this administratordoesn't know you or your family, and state law, which maynot coincide with what this individual had in mind, will determineall of the beneficiaries.
This lack of planning, financial experts say, not only limitschildren's ability to carry out their parents' wishes, it can leadto bitter conflicts within the family.
For example, the article relates the story of a Californiawoman who died in 1994, and had named her three daughtersas "equal partners" in a trust she had established. However,the trust required "unanimous rather than majorityagreement." As the daughters could not decide how theirmother's assets should be divided, costly legal argumentsensued for the next several years.
In another scenario, an elderly woman refused to put herFlorida home in a trust, despite the urgings of her daughter,an only child. Under Florida law, putting the home in a trustwould have enabled the daughter to inherit the home withoutgoing through probate. The cost to put the home in atrust was approximately $600. Whenthe elderly woman died in 2002, a probatehearing was held, and it cost thedaughter $19,000—about 3% of thevalue of the house.
Despite how unsettling the topic ofdeath can be to discuss, experts advisethat communication between the individual,the executor, and the heirs is crucial.
Of course, there is more to estateplanning than simply drafting a will.According to the article, not all wills areas specific as they should be. A willmight not specify the locations of allassets and accounts.
Go Beyond the Will
If a detailed list of all assets and accountsis not provided in a will, expertssay that "checking registries, bank andinvestment statements, and tax returns" might provide some insight into thedeceased's estate. If you believe thatthere may be missing assets from inactivebank and brokerage accounts, checkwith your state comptroller's office.
Sometimes it takes a life-threateningevent to help people recognize theimportance of communicating specificinformation to their family. As the article indicates, a retired college professorhad set up a trust to shelter her assetsand had named one of her daughters asexecutrix. However, after suffering ablood clot in her lung and nearly dying,she realized that she had not left specificrecords detailing what her assets wereand where they were held.
After recuperating, the womandrafted a personal instruction booklet,including the names and contact informationfor her doctors, accounts,financial advisors, and anyone else shewould like notified when she died. Shethen developed a book, , so that others couldlearn from her experience. The book isavailable for $14.95, plus shipping andhandling, from Project Compassion(www.merchantamerica.com/projectcompassion). For more informationabout Project Compassion, visit www.projectcompassion.com.
Remember, the time of your passingwill be an emotional and challengingone for your family. Decision-makingwill not come easily, nor is it likely tocoincide with your intentions unlessyou take the time now to provide clearand specific instructions. Doing socould save your heirs much time,money, and grief.