| WHAT DOES A WILL DO?The simplest way to | | | | according to the will.WHAT ABOUT UPDATING MY |
| ensure that your funds, property and personal effects | | | | WILL?You'll probably need to update your will several |
| will be distributed after your death according to your | | | | times during the course of your life. For example, a |
| wishes is to prepare a will. A will is a legal document | | | | change in marital status, the birth of a child or a move |
| designating the transfer of your property and assets | | | | to a new state should all prompt a review of your will. |
| after you die. Usually, wills can be written by any | | | | You can update your will by amending it by way of a |
| person over the age of 18 who is mentally capable, | | | | Codicil or by drawing up a new one. Generally, people |
| commonly stated as "being of sound mind and | | | | choose to issue a new will that supersedes the old |
| body."WHO NEEDS A WILL?Although wills are simple | | | | document. Be sure to destroy the old will after you |
| to create, about half of all Americans die without one | | | | sign a new one.WHAT ABOUT ESTATE |
| (or Intestate). Without a will to indicate your wishes, the | | | | TAXES?The property included in your will may be |
| court steps in and distributes your property according | | | | subject to taxation. In planning your will, take into |
| to the laws of your state. Wills are not just for the rich; | | | | account the following:---Federal estate taxes will |
| the amount of property you have is irrelevant. A will | | | | generally be due if the net taxable estate is worth |
| ensures that what assets you do have will be given to | | | | more than $1,000,000. This amount is scheduled to |
| family members or other beneficiaries you designate. If | | | | gradually increase from $1,000,000 in 2002/2003 to |
| you have no apparent heirs and die without a will, it's | | | | $3,500,000 in 2009 so that it will eventually shield |
| even possible the state may claim your estate.Having | | | | $3,500,000 in gift or estate transfers from tax per |
| a will is especially important if you have young children | | | | taxpayer. Estates in excess of the exempt amount |
| because it gives you the opportunity to designate a | | | | can be taxed at a rate from 37% to 50% (the top |
| guardian for them in the event of your death. Without | | | | percentage is scheduled to gradually decrease to 45% |
| a will, the court will appoint a guardian for your children | | | | in 2009). Also, note that these estate tax changes are |
| who may be someone you do not even know.WHAT | | | | scheduled to be repealed in 2010. If not extended, the |
| ARE THE ELEMENTS OF A WILL?What you | | | | tax law will revert to the estate and gift tax provisions |
| generally need to make a will:1) Your name and place | | | | in affect in 2001. Consult a tax or financial professional |
| of residence;2) Names and addresses of spouse, | | | | to determine a plan that is right for you and your |
| children and other beneficiaries, such as charities or | | | | family.---State death or inheritance taxes---Federal |
| friends;3) Alternate beneficiaries, in the event a | | | | income taxes---State income taxesYou may be able |
| beneficiary dies before you do;4) Name and address | | | | to minimize your estate tax by establishing a trust or |
| of an Executor/ Executrix to manage your estate;5) | | | | giving gifts during your lifetime. You can also cover the |
| Name and address of an alternative Executor | | | | cost of estate taxes by purchasing a life insurance |
| Executrix, in the event your first choice is unable or | | | | policy intended to pay taxes. Talk to your life insurance |
| unwilling to act;6) Name and address of a guardian for | | | | agent to find out more about how this works.WHERE |
| your minor children;7) Name and address of an | | | | SHOULD I KEEP MY WILL?Once your will is written, |
| alternative guardian, in the event your first choice is | | | | store it in a safe place that is accessible to others |
| unable or unwilling to act;8) The age you wish your | | | | after your death. I suggest that you keep it in a fire |
| minor children to have control of their inheritance;9) | | | | proof box that you can purchase at any office supply |
| Any burial requests you may have (cremation, where | | | | store. I do not suggest that you keep your will in a safe |
| you want to be buried, etc.);10) Your signature;11) Two | | | | deposit box because many states will seal your safe |
| Witnesses' signatures; and12) Notarization.Two of the | | | | deposit box upon your death. Make sure a close friend |
| most important items included in your will are naming a | | | | or relative knows where to find your will.WHAT IS A |
| guardian for minor children and naming an Executor/ | | | | LIVING WILL?A living will is not a part of your will. It is a |
| Executrix.WHAT IS A GUARDIAN?In most cases, a | | | | separate document that lets your family members |
| surviving parent assumes the role of sole guardian. | | | | know what type of care you do or don't want to |
| However, it's important to name a guardian for minor | | | | receive should you become terminally ill or permanently |
| children in your will in case neither you nor your spouse | | | | unconscious. It becomes effective only when you |
| is able and willing to act. The guardian you choose | | | | cannot express your wishes yourself. Discuss your |
| should be over 18 and willing to assume the | | | | wishes as reflected in your living will with family |
| responsibility. Talk to the person ahead of time about | | | | members, and be sure all your doctors have a signed |
| what you are asking. You can name a couple as | | | | copy.WHAT IS A POWER OF ATTORNEY FOR |
| co-guardians, but that may not be advisable. It's always | | | | HEALTH CARE (HEALTH CARE PROXY)?A power |
| possible the guardians may choose to go their | | | | of attorney for health care (health care proxy) is not a |
| separate ways at some later date, and, if so, a | | | | part of your will. It is a separate document that |
| custody battle could ensue. If you do not name a | | | | authorizes someone you name to act in accordance |
| guardian to care for your children, a judge will appoint | | | | with your medical intentions. It becomes effective only |
| one, and it may not be someone you would have | | | | when you cannot express your wishes yourself. You |
| chosen.WHAT IS A EXECUTOR/EXECUTRIX AND | | | | should make sure that all your doctors have a signed |
| WHAT DO THEY DO?An Executor/Executrix is the | | | | copy.WHAT IS A FINANCIAL DURABLE POWER OF |
| person who oversees the distribution of your assets in | | | | ATTORNEY?A financial durable power of attorney is |
| accordance with your will. Most people choose their | | | | not a part of your will. It is a separate document that |
| spouse, an adult child, a relative, or a friend to fulfill this | | | | authorizes someone you name to act in accordance |
| duty.If no Executor/Executrix is named in a will, a | | | | with your financial intentions. It becomes effective only |
| Probate Judge will appoint one. Probate refers to the | | | | when you cannot express your wishes yourself. You |
| legal procedure for the orderly distribution of property | | | | should make sure that all your financial professionals |
| in a person's estate. The Executor/Executrix files the | | | | (stockbrokers, accountants, financial planners) and |
| will in probate court, where a Judge decides if the will is | | | | banks have a signed copy.PLAN AHEADThe end of |
| valid. If it is found to be valid, assets are distributed | | | | your life is something you probably don't want to dwell |
| according to the will. If the will is found to be invalid, | | | | on, but thinking about what will happen to your loved |
| assets are distributed in accordance with state | | | | ones and your assets and personal possessions is |
| laws.Responsibilities usually undertaken by an Executor | | | | important. Making sure you've done all you can to |
| Executrix include:--Paying valid creditors;--Paying | | | | make their lives easier will give you peace of mind. |
| taxes;--Notifying Social Security and other agencies | | | | And once your will is drafted, you won't have to think |
| and companies of your death;--Canceling credit cards, | | | | about it again unless something significant in your life |
| magazine subscriptions, etc.; and--Distributing assets | | | | changes. |