You Can't Take It with You

Question of the week:My New Year's resolution for 2002 was to make a will, and I still haven't gotten around to it. Any thoughts to get me in gear and get it done? --WSJ

Dear WSJ,

I can think of few things that cause more procrastination than wills. Most people know that they should have a will, yet only about 30 percent of Americans actually have one.

But if you need some motivation to make a will, just consider what will happen if you die without one. Your assets will be spilt up between your spouse and kids according to state law. If you don't have a spouse or children, it will go to other relatives. And if you don't have any other relatives, the state itself will get your money. How does that sound?

And if that isn't motivation enough, think about what your family may have to deal with. This recent comment from an Armchair Millionaire community member said it well:

"I had a will made about six years ago. Dying without a will is one of the worst things you could do to your family. Do it now to save a lot of legal grief later." --Doo

The good news is that preparing a will really does not need to be a huge headache. My guide shows you how easy it can be.

The Armchair Millionaire Guide to the Basics of Wills

• What makes them legal. In order to be valid, there are just a few requirements for wills, including:
  • It must state that it is, in fact, your will.
  • You must sign and date it.
  • It must be signed by two or three witnesses (depending on your state) who are not beneficiaries of the will.
  • You must be of legal age and sound mind when you make the will.

• How to prepare a will. There are a number of different do-it-yourself book and software programs out there for making your own will, but this is one area where I really do recommend you use an attorney. In most cases, the fee for preparing a will is not expensive, and can more than pay for itself later. Because the laws dealing with estates and probate can be quite different from one state to another, it's important to use an attorney familiar who knows the law in your area.

• Who to name as executor. Your executor will be in charge of ensuring that your wishes are carried out. Unless your estate is terribly complicated, you can choose anyone who is comfortable taking care of legal and financial matters. This could be a friend, relative, your spouse, or one of your children, provided he or she is of legal age. If you do have complex affairs, consider naming an attorney with knowledge of estate issues to act as executor.

• About your beneficiaries. In every state, your surviving spouse will have least some kind of legal claim to a portion of your estate, no matter what your will states. In addition, any property that you own with someone else as a joint tenant with rights of survivorship will automatically go to that person. Also, money in a pension plan, 401(k) or IRA, as well as the proceeds of life insurance, will go to the person (or people) you named as beneficiary on the account forms. Otherwise, with a few other exceptions, you can give your assets away to anyone you like--all your will needs to do is clearly state your wishes.

• Where to keep your will. A lot of people stash their wills in their safe deposit boxes, but I suggest you not do this. Unless their names are on your box rental agreement, they will not be able to access it immediately after you die, and may even need to get a court order to get it opened. I think the best place is for your lawyer to keep the original, and make sure that your executor knows the name of your lawyer.

THE BOTTOM LINE: People often make a much bigger deal of making wills than they really need to. What really will be a big deal, however, is if you die without one. Make it a priority to get this straightforward chore done soon.