Everyone knows you need a will, yet even in this so-called enlightened age, a surprising number of Americans have never gotten around to preparing one. According to the LegalZoom website, “Approximately 55 percent of American adults do not have a will or other estate plan in place,” a number that has remained fairly constant for the past decade or more. “Among minorities,” LegalZoom reports, “the numbers are higher than in the general population: 68 percent of black adults and 74 percent of Hispanic adults do not have [a will].”
Two Key Steps – and a Third
So, if you’ve taken the time to prepare a will, that’s a decent start, but it’s hardly enough. There’s more you need to do, as you’ll discover in this helpful article on the MarketWatch website, called “When You Write Your Will, Don’t Mess This Up.” The piece was written by lawyer, writer and former IRS investigator Julian Block. He says there are “two chores that most people gladly put off: the first is writing a will – and the second is updating it to reflect changed circumstances.” And, he adds, there’s one more critical decision you need to make (and periodically review): you need to select the right executor.
We hardly need to remind our AgingOptions readers about the importance of having a current will, but in Block’s law practice (and in ours at Life Point Law) we continually encounter people who are either too uninformed or too lazy to get around to preparing one. When Block meets these people, he challenges their lethargy. “I regularly remind them how badly things could turn out if they fail to [prepare a will],” he says. “For instance, their assets might wind up with individuals whom they never intended to benefit or they consider less deserving of their largess than others.” Depending on the size of your estate, dying intestate (without a will or other legal device to allocate your assets) can drain the money you wanted to leave to your offspring, letting your estate dissipate into taxes and legal fees. All of this is frustrating, demoralizing, expensive – and easily avoidable.
Block, writing in MarketWatch, also makes a strong point about the need to ensure that your will, once written, is frequently reviewed to reflect your current life circumstances. It’s an all too common occurrence: someone drafts a will, puts it in the file cabinet or firesafe, and proceeds to forget about it. Meanwhile new children come on the scene, divorces and remarriages take place, family squabbles create emotional distance, and new philanthropic interests replace former ones. Perhaps at some point you moved to another state or had a large rise or drop in net worth. Any or all of these life occurrences can necessitate an update or perhaps a complete re-write of your will. Once again, if you fail to take action now, your heirs will pay the price later.
In the MarketWatch article, author Block spends about two-thirds of his words on a topic that is sometimes overlooked or under-emphasized: selecting an executor. Often the one preparing a will names the family member who seems to be “the logical” choice, frequently the oldest son or daughter, to be the executor; but just because they’re the oldest doesn’t make them well-suited for the task, especially if the estate is complex. Because the executor plays the key role in the settling the estate, writes Block, you should select someone “willing to take jobs that are potentially time-consuming and demanding,” with (we would add) a strong sense of responsibility and attention to detail.
Disorganized People Need Not Apply
To illustrate his point, Block lists some of the key duties an executor will be expected to accomplish:
- The executor has t0 assemble and value all of the deceased’s assets. “Executors have to ferret out records for bank accounts, brokerage accounts, tax-deferred retirement accounts and insurance policies, as well as other assets like real estate, art, jewelry and automobiles,” says Block.
- Block adds, executors need to “unearth information about debts, mortgages and tax records, and figure out if the person had safe-deposit boxes, made loans to family members or others, or made charitable pledges.”
- Executors are responsible for paying all bills and fees, often using paid professionals for some of these tasks which (says Block) “might include the timely filing of the deceased’s final income tax return, federal estate taxes, state inheritance taxes and the estate’s income tax return, along with the payment of any taxes owed.”
- After they’ve valued assets and paid bills, the executor distributes assets to heirs and beneficiaries. In our experience, this can be where family quarrels get particularly intense, especially when siblings mistrust one another or ex-spouses become involved.
- Finally, the executor is required to submit a full accounting to the court of everything they’ve done to settle the estate.
At every step along the way, the executor can unfortunately make errors than can have serious financial and legal ramifications. If you’re the one choosing an executor, you need to choose wisely. If you’re named to serve as an executor, make sure you get good advice all along the way. As Julian Block warns in MarketWatch, “Many executors belatedly learn that their reliance on the counsel of attorneys, accountants and other professional advisers doesn’t relieve them of responsibility for mistakes.” Select your advisers with care.
Fully-Integrated Retirement Planning
Sound legal planning is important, but when it comes to comprehensive retirement planning, it’s just one facet among many. Yet we often meet people at our seminars or talk with callers on the radio who think they have a “retirement plan” when all they truly have is an outdated will and a rudimentary retirement savings account. At AgingOptions our approach to retirement planning – which we call LifePlanning – integrates your financial and legal preparations with medical planning, housing choices and family communications to ensure that you’ll be able to retire with your assets protected and your family unburdened. Your LifePlan is like a well-drawn road map to take you safely through the twists and turns and ups and downs of your retirement years.
Please accept our invitation to learn more about this revolutionary approach to retirement planning by joining Rajiv Nagaich at one of our popular LifePlanning Seminars. We conduct these in locations throughout the Puget Sound region, so there’s bound to be one convenient for you. Click here for our Live Events page where you can see all the seminars currently scheduled and then sign up for the event of your choice. Join men and women just like you who are taking charge of their retirement future. And age on!
(originally reported at www.marketwatch.com)
Image Source: Dollars and Sense