'Will' should be a word found in every American's vocabulary

September 08, 1995|By Andrew Leckey | Andrew Leckey,Tribune Media Services

The much-publicized contention of starlet Anna Nicole Smith that she didn't receive the financial riches she deserved after the death of her billionaire husband may have been the only time this year many U.S. households used the word "will."

Not only do most families avoid talking about wills, they usually never get around to making them. Seventy percent of Americans die without ever writing one.

Yet a well-executed will gives important control over eventual distribution of property. You can also choose the person who will carry out the administration of your estate. If you don't have one, you're letting the state decide.

The number of challenged wills has been growing, so it makes sense to avoid the potential for prolonged litigation.

"Generally, wills stand up very well in court, but there are challenges," said Kerry Peck, attorney with Kerry R. Peck & Associates in Chicago. "One reason to challenge a will is that undue influence was exerted on the person who wrote it, while the other is lack of capacity, meaning the person didn't have the mental ability to understand what he was doing."

Before you see an attorney, put together an overview of property you own and ballpark figures on assets such as bank accounts, stocks and death benefits from pension plans. Make a memorandum of important personal facts, such as addresses, birth dates, Social Security numbers, date and place of marriage and the addresses and ages of beneficiaries. Lack of information can dramatically slow the process of executing a will.

Decide who should receive property and in what amounts. Lack of clarity may cause problems for beneficiaries. Wills often arrange for payment of taxes and funeral and burial expenses, simplifying the probating of the estate and saving added court costs.

Choose the individual who will be guardian of your children, or the court will do so for you. Consider whether a trust should be created for your spouse, children or others, since these can protect your estate against loss or guard against inexperienced VTC handling by heirs. Be careful about selecting an executor, making sure that he or she is both willing and able to do the job. Go over designated beneficiaries of life insurance, pensions and individual retirement accounts, for such contracts take precedence over stipulations in a will.

A simple will can be obtained for $100 to $200, although some legal chains charge less. A higher-end charge would be $1,000, although a more complicated will that involves tax planning can run $2,000 to $3,000. There are also inexpensive do-it-yourself kits and computer software programs, but in all cases try to be certain that what you do will hold up in court.

Store the will in a safe place, with the executor or family members knowing where it is and able to get to it. Update the will every three years or whenever a major change occurs, such as in what is owned, marital status or the number of children. Make changes in a will when appropriate by executing an amendment, known as a codicil, through your lawyer.

"A big trend over the past 20 years has been to make wills part of an overall estate plan in which a living trust is actually the most important part," observed Carol Harrington, partner in the Chicago office of McDermott, Will & Emery.

A living trust is a document putting a professional in charge of your investments during your lifetime if and when you're no longer able to manage your money or don't want to do so. It can also continue to handle your holdings after your death if you don't want your heirs to have that responsibility. A living trust is likely to cost $1,200 to $1,500, although legal costs will be saved later.

"I'm concerned about the way living trusts are marketed by some non-lawyers as the key to all estate planning, because they aren't," said William Weinsheimer, chairman of the editorial board of the American College of Trust and Estate Council in Los Angeles. "A living trust is basically a device for avoiding probate and keeping confidentiality."

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