Detroit Area Council, BSA
1776 West Warren Ave.,  Detroit, MI  48208
Phone: (313) 897-1965     Fax: (313) 897-9870

How to Make a Will That Works 
Index

Part I
Will

 

Some estate plans are more effective than others. What many of the best plans have in common, however, is a well-thought-out will that is designed to work in concert with other estate planning tools. Before reading further, you might find it useful to take a few minutes to consider the “Four P’s” of estate planning:

  •  Persons. Who are the people and charitable interests for whom you would like to provide?

  •  Property. List all of your property, in whatever form, along with its cost, today’s value, and the way it is owned.

  •  Plans. Consider how you would like to “match” your property with the persons in your life.

  •  Planners. List all professional advisors who would assist you in making your plans a reality.

Your will is just one part of an effective estate plan – but a vitally important part. Following you’ll find answers to a number of commonly asked questions about making and revising wills.

  1. Is it true that most people don’t have wills?

Yes.  There have been published reports that over 50% of the more than two million Americans who pass away each year do not have valid wills.

  1. Why don’t more people have wills?

Because they don’t realize how important a will is. Some think they don’t own enough property to need one.  Some believe that life insurance and retirement plan beneficiary designations or joint ownership arrangements are sufficient. Some think their spouse inherits everything automatically. But apparently most simply procrastinate.  

  1. What happens when people die without a valid will?

Their state’s laws of “descent and distribution” come into play. These laws amount to a “state-written will” for those who haven’t made their own.  Provisions vary from state to state.

  1. Aren’t state laws adequate for most situations?

No, because they’re impersonal. They make no exceptions. They may also deplete your estate unnecessarily, as certain fees and other expenses can be minimized or eliminated through a well-planned will.

The laws are written to allow a court to decide who should be your administrator or who should be guardian of your surviving minor children. They cannot make bequests to charities and friends. You must make your wishes known via a will, trust, or other arrangement.

  1. How does “bonding” work?

Many states require that estate administrators be bonded to ensure that they handle the estate honestly. It’s a form of insurance. The non-refundable premium is paid from the estate. The bond can be waived in a will or trust, leaving more for your loved ones or for charity.

  1. Does everyone have an “estate”?

Yes, if they own anything at all. The term applies not just to real estate but to cash, all personal property, investments, retirement plan assets, life insurance, and other forms of assets.

  1. Doesn’t joint ownership make a will unnecessary?

No. That’s a common misconception. Joint ownership may create needless estate taxes and may result in gift taxes being due. It may also deny you complete control over your property while you’re still living. Joint ownership is a poor substitute for a will yet ownership is a poor substitute for a will yet can often work well in conjunction with one.

  1. Can a will help reduce estate taxes?

Yes. Through a well-planned will, you can make a number of provisions that can reduce estate taxes that may otherwise be owed.  You may also be able to direct which heirs will be responsible for the payment of taxes if you do not wish for them to be borne equally.

 Remember that tax laws change over time. Tax law changes in 2001, for example, are expected to reduce or eliminate estate taxes for most Americans over the next decade. You and your advisors should review your plans whenever legislation in enacted which may affect them.

  1. Should both husband and wife have wills?

Yes. It’s important that each has a will, even when the two wills are essentially the same. The wills should complement each other and take into account any special bequests to other family members.

  1. What is the “unlimited marital deduction”?

A husband or wife may leave all property to his or her spouse and pay no federal estate taxes on the estate of the first to die. In your will, you can take advantage of the marital deduction and eliminate taxes in this manner. (Be sure to talk with advisors, however, about ways your will and other plans can serve to reduce or eliminate taxes on the estate of the surviving spouse.)

  1. Do I need a will if my estate is small?

Yes. The smaller the estate, the more important that it be settled quickly, as delays usually mean that it be settled quickly, as delays usually mean increased expenses. Besides, your estate may be larger than you realize. Don’t make the mistake of thinking of your property in terms of what it originally cost. In many cases, its value may have increased substantially.

  1. Can I write my own will without hiring an attorney?

You can, but it’s generally not advisable. Many “homemade” wills are declared invalid by the courts. There is no substitute for the professional expertise of a competent attorney.

For more information regarding wills or estate planning, contact Chuck Lang , Director of Develompent at (313) 361-1250.

Part II
 
  1. How much does it cost to have an attorney write my will?

That depends on how simple or complicated your plans are. But wills generally cost less than most people expect and undoubtedly less than the emotional and financial cost of not having one. Ask your attorney in advance about the fee. It’s a question answered routinely.

  1. Can I do anything to reduce attorney fees?

Yes. Attorneys charge for their and knowledge, so the more time you can save them, the less the cost should be. Take along all the basis information that will be needed. Make the lists described on page 3. Remember to include your Social Security and Veterans Administration numbers (if applicable) and recent income tax records. Don’t forget position and profit sharing information. Be prepared to discuss whom you would like to be appointed to settle your estate and/ or to be guardian for minor children, if any.

  1. Can I name my spouse as personal representative?

You can. Or a close relative, friend, or the trust department of a bank or other professional fiduciary may be named. Ask your attorney or other advisors for guidance.

  1. Must I get permission from the personal representative before naming him or her in my will?

You should. It’s not a legal requirement but it is a courtesy. Your assets or the terms of your will may dictate the qualifications necessary for a person to serve as your representative and affect his or her willingness to serve.

  1. Should my will direct what compensation my personal representative is to receive for serving?

Fees are generally based on the size of the estate. The probate court will approve the representative’s or administrator’s fee, so it’s not necessary to specify fees in the will. If the personal representative is not a corporate entity but your spouse, a close friend, or beneficiary, he or she may choose to waive such compensation.

  1. After agreeing to serve can a personal representative later refuse?

Yes, and this does occur for reasons of ill health, travel, or the press of other business. That’s one reason it’s wise to name an alternate.

  1. What happens if my personal representative dies before I do and I have not
    named alternate?

The court appoints an alternate administrator, who may not be the one you would choose. Naming an alternate representative, preferably younger than you, is a good idea. The trust department of your bank may be a good choice to act as representative, because it should always be able to serve.

  1. What does the personal representative do?
  • Obtains the death certificate and provides copies to your insurance company, the Social Security office, and others.
  • Notifies banks where you have accounts or safe-deposit boxes.
  • Arranges for appraisal of your property, if required.
  • Safeguards your property.
  • Presents your will to the probate court.
  • Defends your will if challenged.
  • Locates witnesses to your will, if necessary.
  • Collects debts due your estate.
  • Advertises for any just claims against your estate and pays them in order or priority.
  • Provides interim management for business interests, if necessary.
  • Inspects and maintains your real estate.
  • Collects rents if and when due.
  • Completes and files state and federal estate and income tax returns, as required by law, in time to avoid penalties.
  • Defends your estate against improper tax assessments.
  • Establishes any trusts created by your will.
  • Secures any payments due such trusts.
  • Disposes of your property according to your instructions.
  • Prepares final accounting and obtains receipts and releases fro m heirs, if appropriate.
  1. Should I include funeral instructions in my will?

It is usually better to leave separate instructions and tell your relatives or close friends where to find them.

  1. Is my will confidential or can anyone read it?

A will becomes a public document at death, available to anyone who wishes to see it.

  1. How much detail should a will contain regarding the disposition of particular items of property?

Enough to prevent misunderstandings among heirs, but not in such detail that nay sale of property before your death would cause confusion. It may be best to treat your property as a whole and divide it by percentages. Of course, your decision will depend on the amount and nature of the assets you are distributing.

  1. How far should I go in my will to try to foresee future events?

Think ahead on behalf of your heirs as much as practical. Try to make bequests appropriate to their future needs and family circumstances while leaving them free to use their inheritance as needed.

For more information regarding wills or estate planning, contact Chuck Lang, Director of Development at (313) 361-1250.

Part III

For more information regarding wills or estate planning, contact Chuck Lang ,Director of Developmentat (313) 361-1250.

Last Edited March 05, 2007