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About Will Based Estate Planning

 

What is a will? It is a document that contains instructions for your personal representative and the probate court. The instructions are for the transfer of your probate estate to your loved ones. To be effective it must be signed by you and witnessed by two other persons. Most couples select guardians for minor children in their wills.

 

Wills can be relatively simple and inexpensive. Wills prepared in this office for couples start at $400. As your life and family circumstances becomes more complicated, so to can your wills.

 

Do I need a will? If you fail to plan, the state legislature has a plan for you. But, the state plan might not be what you wanted. And, without a will, your legacy to your loved ones will likely include additional expense and delay in the probate court.

 

Wills only control assets you hold in your own name. You probably own assets in three different ways:

 

  •  In your own name
  • Jointly with Someone Else
  •  By contract
  • Through beneficiary designations
  • Trusts

 

Wills will not transfer assets you hold jointly with your spouse. Jointly held property will go to the survivor of the two of you by operation of law.

 

Assets with beneficiary designations will not pass through your will (unless you make them payable to your estate). Common examples of assets controlled by beneficiary designations are life insurance, benefits from work (401K plan assets, pensions) and some bank and brokerage accounts.

 

Even with a simple will you need to understand that your estate plan will include provisions that you may not have thought about. Joint designations on bank accounts, or beneficiary designations on life insurance and retirement plans often control the bulk of your estate. You need to make sure the account and beneficiary designations are current, that you understand the choices you have made, and that those choices will implement the plan you want for your loved ones and that.

 

What documents are used in will based estate plans?

 

  • Wills (here are the details)
  • Trusts (for personal planning and for tax planning)
  • Powers of Attorney (for the possibility of mental disability)
  • Living Wills (who will make medical decisions for me if I canít)

Some disadvantages to will based planning are:

 

  • Wills only control assets in your own name
  • Wills lead to the expense and delay of probate

For some information about probate avoidance, see Revocable Living Trusts.

 

Disability Planning: As we age, we usually think about three elements of disability planning. Powers of attorney and living wills often are used in this part of your estate plan. Your plan should consider.

  • Who will make medical decisions for me if I canít make them?
  • What if I canít make financial decisions for myself?
  • If I need to be in a nursing home, how will my family pay the costs?

 

See the page on Disability Planning,which provides more information on planning for physical or mental disability.                         

                                           

 

Law Offices of Richard Jensen

Rick Jensen, attorney and counsellor at law

(952) 944-0406     email: rickj@jenslaw.com

 

 

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