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Making Sense Out of Dollars

Will It?

Joel Lerner, Columnist
Posted 2/5/21

Part 5 of 12

Last week we discussed the concept of doing a will by yourself by using pre-designed forms and computer software and avoiding the expertise of an attorney.

As stated before, I am …

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Making Sense Out of Dollars

Will It?

Posted

Part 5 of 12

Last week we discussed the concept of doing a will by yourself by using pre-designed forms and computer software and avoiding the expertise of an attorney.

As stated before, I am against a do-it-yourself will but I know there are some readers that prefer doing it on their own.

I explained last week what to look for in a self-drawn will and some of its pitfalls. Today let’s continue this topic.

What Situations Would Prohibit Me From Drawing Up A Basic Will By Myself?

If one of the following applies to your situation, then you probably need something more than a basic will:

• You expect to owe estate tax when you die or when your spouse does.

• You want to control what happens to property after your death -- for example, you want to leave some property in trust for your child and have it go to your grandchildren when your child dies.

• You have a child with a disability or other special need that you wish to address in your estate plan. (See Special Needs Trusts)

• You have children from a prior marriage and you fear conflict between them and your current spouse.

• You think someone might contest your will claiming that you were not mentally competent when writing it, or that the will was procured by fraud or duress.

What Types Of Property Are Not Acceptable In A Will?

Wills are wonderful, simple, inexpensive ways to address many people’s estate planning needs, but they can’t do it all. Here are some things you shouldn’t expect to accomplish in your will.

Leave Certain Kinds of Property

In most cases, you cannot use your will to leave:

• Property you hold in joint tenancy with someone else (or in “tenancy by the entirety” or “community property with right of survivorship” with your spouse).

• Property you’ve transferred to a living trust,

• Proceeds of a life insurance policy for which you have named a beneficiary.

• Money in a pension plan, individual retirement account (IRA), 401(k) plan, or other retirement plan for which you have named a beneficiary on forms provided by the account administrator.

• Property held in beneficiary (transfer-on-death or TOD) form. This may include stocks, bonds, and — in some states — real estate or vehicles.

• Money in a payable-on-death bank account.

Arrange to Care for a Beneficiary with Special Needs

If you want to provide long-term care for someone, a will isn’t the place. Far better to set up a trust that’s tailored to the beneficiary’s needs. A special needs trust can provide extra income for a loved one with disabilities, without jeopardizing government benefits.

THOUGHT FOR THE WEEK

Why fit in when you were born to stand out?

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