Understanding Last Will and Testament
The first thing people think about when discussing estate planning is their last will and testament or, for short their will. For those facing a cancer diagnosis, there are a few areas key areas to address and, unfortunately, there are several misconceptions. The next several posts will address those misconceptions and provide a guide to creating a will.
Before moving on, let me first explain that legal documents usually address the “what if” areas of our life we typically feel uncomfortable discussing. The purpose of addressing these areas early is to ensure you, your family and property are protected. While it might be uncomfortable to read while battling cancer, remember that these type of documents are drafted daily by individuals of all ages, health status and more. We address these here, because proper estate planning is of critical importance regardless of diagnosis and life expectancy.
Create Your Will
Without a will or trust, assets fall under the probate courts’ domain and into a state called “intestate”. Our courts do not like distributing assets and paying creators from estates without a roadmap. Intestate statutes follow an orderly plan for each estate. While each state has slightly different rules, the priority, or who inherits first, under intestate code generally start with spouses and children. If those relationships do not exist, the priority shifts to parents, siblings and then to aunts and uncles, etc.
Each state implements intestate differently. But, the system is very rigid and does not offer flexibility to account for varying family issues or circumstances. As an example, let’s assume, the decedent (without a will or trust) wanted to give more of his/her estate to a destitute aunt and less to his/her very successful and wealthy children. Under intestate it wouldn’t matter. The child would likely inherit over the aunt.
Making sure you have drafted and executed a valid will ensures a decedent’s wishes are followed instead of the strict guidelines of intestate control.
If you need a will or want to update one there are a myriad of options. A person could spend $50 at Staples or on an online legal site and buy a boilerplate form that only requires you to fill out names. Or a person could spend thousands of dollars to include high-level tax planning. There are also many options in between. It depends on the sophistication of the estate, how the testator wants to disburse the estate and what state you live in. Feel free to ask your questions in the comments section below
Review Your Will
If you already have a will then review it to make sure it is up-to-date. People’s lives constantly change and an outdated will cannot be interpreted differently than it is written! Life changing events generally impacting a will are marriage, divorce, death of a close family member, birth of a child, child reaching majority status, household move, job or career change, retirement or the need to care for a loved one. Each one could impact your will. The general rule in estate planning is to review your will every 5-7 years.
Protect Your Wishes
Remember, take charge of your wishes or the courts will interpret them! A little time and money now can protect your wishes, your family and your assets later!