Proper preparation of will helpful to loved ones

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The simplest way to ensure that your funds, property and personal effects will be distributed after your death according to your wishes is to prepare a will. A will is a legal document designating the transfer of your property and assets after you die. Wills can usually be written by any person over the age of 18 who is mentally capable, commonly stated as being of sound mind and memory. The state may impose additional requirements.

Although wills are simple to create, about half of all Americans die without one (or intestate). Without a will to indicate your wishes, the court steps in and distributes your property according to the laws of your state. Wills are not just for the rich: the amount of property you have is irrelevant. A will ensures that what assets you do have will be given to family members or other beneficiaries you designate. If you have no apparent heirs and die without a will, it’s even possible the state may claim your estate.

Having a will is especially important if you have young children because it gives you the opportunity to designate a guardian for them in the event of your death. Without a will, the court will appoint a guardian for your children.

Here are the basic elements generally included in a will:

Your name and place of residence.

A brief description of your assets.

Names of spouse, children, and other beneficiaries, such as charities or friends.

Alternate beneficiaries, in the event a beneficiary dies before you do.

Specific gifts, such as an auto or residence.

Establishment of trusts, if desired.

Cancellation of debts owed to you, if desired.

Name of an executor to manage the estate.

Name of guardian for minor children.

Name of alternative guardian, in the event your first choice is unable or unwilling to act.

Your signature.

Witnesses’ signatures.

In most cases, a surviving parent assumes the role of sole guardian of minor children. However, it’s important to name a guardian for such children in your will in case neither you nor your spouse is able and willing to act as sole guardian. The guardian you choose should be over 18 and willing to assume the responsibility. Talk to the person ahead of time about what you are asking. You can name a couple as co-guardians, but that may not be advisable. It’s always possible the guardians may choose to go their separate ways at some later date, and if so, a custody battle could ensue. If you do not name a guardian to care for your children, a judge will appoint one, and it may not be someone you would have chosen.

An executor is the person who oversees the distribution of your assets in accordance with your will. Most people choose their spouses, an adult child, a relative, a friend, a trust company or an attorney to fulfill this duty. You should expect your estate to pay an independent executor for this service.

If no executor is named in a will, a probate judge will appoint one. Probate refers to the legal procedure for the orderly distribution of property in a person’s estate. The executor files the will in probate court, where a judge decides if the will is valid. If it is found to be valid, assets are distributed according to the will. If the will is found to be invalid, assets are distributed in accordance with state laws.

Responsibilites usually undertaken by an executor include:

Paying valid creditors.

Paying taxes.

Notifying Social Security and other agencies and companies of the death.

Cancelling credit cards, magazine subscriptions, etc.

Distributing assets according to the will.

Start by organizing what you need, outline your objectives, inventory your assets, estimate your outstanding debts and prepare a list of family members and other beneficiaries. Use this information to carefully consider how you want to distribute your assets.

Ask yourself a lot of questions:

Is it important to pass my property to my heirs in the most tax efficient manner?

Do I need to establish a trust to provide for my spouse or other beneficiaries?

How much money will my grandchild need for college?

Do I need to provide for a child who has a disability?

Taking inventory of your assets may be the key to making a will. Assets should be mentioned in your will. Any items not specifically mentioned may be addressed in a catch-all clause of your will called a “residuary clause,” which generally states `I give the remainder of my estate to…’ Without this clause, items not specifically mentioned will be distributed in accordance with state law.

Outstanding debts usually will be paid by your estate before your beneficiaries receive their shares. You may want to clear up debts that you know will be a problem, or make specific provisions for payment of those debts in your will. Remember to be specific and clear when naming beneficiaries. State the person’s full name, as well as his or her relationship to you (child, cousin, friend, etc.), so your beneficiaries will know exactly who you mean. Clarity will also help to prevent challenges to your will.