The impending arrival of a newborn may require more planning than you realize. If you've never had a will prepared before, now is the time to start thinking about it. If you have an existing will, you'll want to have it updated.
One of the most common questions I encounter as an attorney practicing in the area of estate planning is:“Do I Need a Will?”There is a common misconception that wills are only for the wealthy or those concerned with saving taxes.In fact, the primary reason to have a will is not to save taxes, but rather to protect your minor children and to ensure that your property passes to your loved ones.
A will can protect your minor children in two ways.The first is by naming a guardian to look after your children should something happen to both you and your spouse.This ensures that your children are raised and cared for by someone you trust and who shares the same values as you.Without a will, the guardian for your children will be selected by the court and may not be the same person you would have chosen.
A second way in which a will can protect your children is through the use of a trust.Rather than leaving property outright to your children, your will can distribute your assets to a trustee.The trustee will manage the funds for the benefit of your children and distribute the income and principal at the times that you designate.The use of a trust avoids property from passing to your children before they are responsible enough to manage their finances.
High profile lawsuits involving wills and trusts, such as the current litigation involving Anna Nicole Smith, teach us the value of proper estate planning.The most important point to keep in mind is that everyone has an estate plan.Some of us take steps to consciously design that plan.For others, that plan is written by the state.If you die without a will, your property will pass under what is known as the intestacy laws.These laws vary from state to state and may not be consistent with your wishes.
A will also allows you to select “fiduciaries.”These are the individuals who are responsible for carrying out your wishes.One such fiduciary is the executor who is responsible for marshalling your assets, paying your debts and funeral expenses, and distributing your property to your beneficiaries.As noted above, a trustee may also be appointed to manage property on behalf of a child or grandchild.
Now that you know you need a will, how do you go about making one?Should you buy a preprinted form or a software program to write one?You could, but your will might not be legal.There are many important rules that you might overlook if you attempt to draft a will yourself.Did you know that many of your assets might not be distributed under your will?For example, jointly held bank accounts and real property, life insurance, and retirement accounts will pass to certain named beneficiaries and not to those named under your will.An experienced lawyer will know these rules and will help you develop the best plan for you.
The cost of having a will drafted depends upon the nature of your assets and the amount of time the lawyer spends on your plan.For a simple will (one involving no tax planning), the cost should be minimal.Many lawyers will meet with you for an initial consultation at no charge and will tell you in advance how much his or her services will cost.
Steven M. Ratner practices estate planning and elder law in New York.Mr. Ratner is licensed in New York and California and is a member of the National Academy of Elder Law Attorneys.This article is based on New York law and should not be construed as legal advice.Questions and comments regarding this article can be sent to Mr. Ratner at 375 Park Avenue, Suite 1508, New York, NY 10152, (212) 754-9117,
