With apologies, to WILL.I.AM, the singer for the Black Eyed Peas, this article is about an issue that we often identify when we speak to folks about their personal financial situation: they usually don’t have an up-to-date will.
Everyone should have a will and basic estate planning documents (powers of attorney for health and financial matters, child care authorization, etc.). These are fundamental elements of a financial plan regardless of age or level of assets.
- Without a will, the state will make the decisions about who takes care of your children and how your possessions are distributed to others. (Do you want the state to essentially write your will for you?)
- Without a living will to manage your health care issues, if you are severely injured, and have no real prospect of getting better, you may be left on a respirator or other life-prolonging device even though it was not your intention to do so.
- Without a health care power of attorney, you will not have a representative to help communicate health care decisions to your doctors if you are unable to do so.
- Finally, without a financial power of attorney, a representative of the state could make decisions about your financial issues if you are unable to.
Having a will does not help you avoid probate. Probate is “the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person’s property under the valid will.” In states with high probate costs (like California), placing assets in a trust can help avoid the costs of probate. In Washington state, because probate costs are low, most attorneys don’t recommend that you set up a trust unless you have substantial assets or privacy concerns.
It is not difficult to have a will created. Most reputable estate planning lawyers in the area charge around $500 for a simple will and set of directives. Best of all, if you work with an attorney, he or she will see that your will is signed and witnessed so it is valid in Washington.
Do it yourselfers can buy a software program like Quicken Willmaker or Nolo templates and use it to create estate planning documents. Often we see that folks will complete these documents and print them out, but they won’t bother to get them witnessed by a third party. This makes them null and void in Washington.
So if you haven’t done so, make a resolution to create or update your will this month … so you can get past having to say “WILL.I.NEED”!
P.S., Keep in mind that assets that pass to designated beneficiaries (401k, 403b, IRA, life insurance death benefits, etc.) do not follow instructions in a will. They pass to whoever is listed as the beneficiary regardless of whether that designation conflicts with your will or your current preference.
~ Brooks, Hughes & Jones, Partners in Wealth Management, Tacoma, WA