Wills make life (and death) easier
West Virginia University Foundation, Inc.
Many people think that preparing a will is too expensive and too much bother. The alternative, though, is to allow state law to make all of the decisions for you, whether you would have chosen the same results or not.
Over 60% of Americans have no will. They are giving up benefits for their family or others by not planning ahead.
Simple wills often cost very little in comparison to what they are protecting and can eliminate certain fees that would otherwise be required.
For example, an executor must post a bond unless the
will does not require it. With
a will, the bond cost can be eliminated. Most simple wills cost less than the bond, saving assets for more appropriate uses
The process of preparing a will starts with listing what you own, including real estate, personal property, stocks, savings and checking accounts, business interests, retirement funds, etc. Warning—the total may be surprising!
To make your executor's job easier, you could compile a three-ring notebook containing that list and the locations for all important financial and legal documents or even copies of them.
If you and your spouse own more than a certain amount of property, the estate of the second spouse to die is likely to owe federal estate taxes (currently 45%). The amount owed can be lowered or eliminated with timely estate planning.
Each of us has a tax exemption available that applies to our estate. It allows us to avoid federal taxes on $2,000,000 worth of property. But if that tax exemption is not used in a certain way through your will or revocable trust, the full benefit can be lost.
In coming years, the federaltax-free amount is going to increase. For persons who die in 2009, $3.5 million of their estate gifts will be tax-free. In 2010, the estate tax will be repealed for that single year. The tax-free amount for 2011 and later will be $1 million.
There are also two unlimited deductions that may benefit your estate. They are the marital and charitable deductions. Gifts to spouses and charities are tax-free in any amount. They do not use any of the tax exemption. You can also set up a charitable trust in your will or revocable trust to provide income to family members that will lower estate taxes and help the charity you choose.
Preparing a will can protect family members and others and help your favorite charity continue its work.
That's good planning.