GRAND RAPIDS, Mich. (WOTV)- Do you have a will? Many people don’t, and the number who do has been dropping. In 2020, just 32 percent of American adults said they had a will or other estate-planning document, according to a survey by Caring.com, down 25 percent from 2017.
The drop is surprising, since creating a will is one of the first steps to making a financial plan. Why don’t people have wills? Translating thought to action can be a challenge: 60 percent of the survey’s 2,400 respondents said estate planning is important, but significantly fewer have created a will or estate plan. Many worry that they won’t know how to draw up these documents, or that it may be too expensive. Others just haven’t gotten around to it.
While planning for the end of life may not be fun, doing so offers peace of mind, as it takes the uncertainty out of what will happen to your estate when you die, says Hugh Drake, a trust and estate attorney who’s a partner at Brown, Hay & Stephens in Springfield, Illinois, and vice-chair of the Trust and Estate Division of the American Bar Association. Still, many of his clients say they don’t feel a will is necessary, because their estate is so simple. “In reality, it’s not the value of the estate that determines the need for a will,” he explains. “Knowing who will be in charge of resolving administrative issues and who will be the recipients of the assets will avoid a lot of anxiety, consternation and conflict among family members.”
What happens if you don’t leave a will?
Some people mistakenly believe that their assets will become the property of the state, Drake points out. “But it is true that there are laws of intestacy, which direct to whom your probate assets will be distributed in the absence of a will. It is often said that if you don’t have a will, the state has one for you.”
Is doing a will yourself an option?
Yes, “at least in theory,” asserts David English, a professor of law at the University of Missouri and former chair of the American Bar Association’s Commission on Law and Aging. “About half of all states allow an individual to sign a ‘holographic’ will, which is a handwritten will. Also, the software programs for writing your own will have gotten better over the years. However, a major problem is often not the form but the issues that need to be thought through in preparing the will.”
Drake agrees, adding, “Working with an attorney who does this day in and out is very worthwhile, whether to draft it from the outset or simply review a will the client has created.”
If you have a will, or plan to make one yourself, English and Drake advise avoiding these common mistakes to save your loved ones unnecessary grief and confusion.
- Is not signed properly. Not only must you, as the maker of the will, sign it, but two witnesses who were present when you signed must sign it, too. Neither can be a beneficiary. In a majority of states, any gift to a witness-beneficiary will be reduced or even voided.
- Does not dispose of all property. Often DIY wills leave out the “residuary provision,” which picks up assets that may have been overlooked and not listed specifically in the will.
- Creates joint tenancy assets. These allow another individual to help write checks on a bank account, for instance, or to become the owner of a piece of real estate upon the death of the original grantor. Unfortunately, unintended consequences from these arrangements can create litigation. For example, the person who added another to a checking account as a joint tenant may not have understood that the entire account will pass to the joint tenant rather than to the estate.
- Has unclear descriptions. You may have a keepsake that you want to give to a particular relative. What happens when you have more than one item that is similar, or relatives with similar names? Such things can cause hard feelings.
- Does not take into account property passing outside of the will. Many assets (life insurance, pensions, bank accounts, etc.) can be set up to pass directly to the named beneficiary. As these assets are not controlled by the will, this is one area where counseling by a professional may be wise.
- Fails to anticipate the death of beneficiaries or the executor. It’s important to name alternate beneficiaries, or an alternate executor, in case any of these individuals die before you.
(Sponsored by AARP Michigan).