Saturday, November 24, 2007

Basics of the WILL




WHAT IS A WILL?

A will is a legal document that states how a person's property is to be
distributed after their death. In spite of the importance of having a will
to carry out one's last wishes, most Americans unfortunately, die without one.

IS HAVING A WILL EXPENSIVE?

Many people never have a will drawn up because they think it will be too
expensive or too complicated. However, what these people do not realize is
that a will is very affordable -- as little as $50-$100 -- and a simple WILL can
often be done very quickly. There are several computer software versions for creating your WILL in the privacy of your home or office.

I DON'T HAVE MANY ASSETS, DO I REALLY NEED A WILL?

The other prevailing myth about wills is that only the rich need them.
However, almost everyone needs a will. The amount of money in one's estate
is not important because you always have something and unless you do not
properly designate to whom it will pass to upon your death, it may go where
you do not want it to go.

If a person dies without a will, the state will
determine where your property goes according to a formula passed by the
Legislature, which may or may not be consistent with your wishes.

WHAT IS THE CRITERIA NEEDED TO CREATE A WILL?

To make a valid will, you must be 18 years old. You must also be "of
sound mind" -- that is, you must have a general understanding of the extent
of your property and the "natural objects of your bounty," such as your
spouse, children or siblings. The will must also be signed and witnessed by
two people. After the will is executed, it can later be changed by the
subsequent execution of documents termed "codicils" which act as amendments
to the original will. A person can also completely cancel a prior will by
execution of a subsequent will.

Even if you do have a will, if the document is not properly drawn up,
your wishes may still not be respected. When someone dies, it is not
uncommon for the children, spouse, relatives and others to fight over the
division of the estate. Sometimes the dispute ends up in court, which
ultimately costs the estate. If you do think that your will may be
vulnerable to challenge you should discuss with your lawyer your concerns so
that the will is "bullet-proof" against challenges.

You should also keep in mind that there are various ways that property
can be passed to another party outside of a will. Such instruments include
beneficiary deeds with real estate or "Transfer on Death" documents which
pass the ultimate ownership of certain personal property. These documents
require that a beneficiary becomes the lawful owner of the property upon a
person's death.

It is also important to note that property or bank accounts
which are held jointly with another person will be passed in the same
fashion. However, these methods of estate planning should be used in place
of a will only after you have talked to a lawyer. Furthermore, these methods
should be used in conjunction with a will, not in the place of such a
document, because you will need a will for other property that you own or
that might come to you later.

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