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Do You Really Need a Will?
by Roger Wohlner (Write for us!)
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Many people believe they don't need a will. But
how valid are the more common reasons for not preparing a will?
Your estate is too small
Some believe that if their estate won't be subject to estate taxes (in 2005, your taxable estate must be over $1,500,000 before estate taxes would be owed), there is no need for a will. However, a will's purpose is not to save estate taxes, but to provide for the distribution of your assets, name guardians for minor children, and select an executor for your estate.
All your property is jointly owned
When one owner dies, jointly owned property passes directly to the joint owner, regardless of provisions in a will. Also, the unlimited marital deduction allows you to leave any amount of your estate to your spouse without paying estate taxes. Thus, many married couples use joint property ownership as their sole estate planning technique. However, if your joint taxable estate exceeds the estate tax exclusion amount ($1,500,000 in 2005, but scheduled to increase to $2,000,000 in 2006 and $3,500,000 in 2009), your estate may save estate taxes by distributing some assets to other heirs.
A living trust will distribute your assets
Only assets actually conveyed to the living trust are controlled by the trust document. Typically a pour over will is also needed, which places any asset not held by the trust at your death in the trust.
You expect your estate to grow significantly in the future
Some feel it is premature to plan their estate while it is being built. However, a will can be changed. In fact, you should periodically review your entire estate plan to see if changes in your personal situation, preferences, or tax laws require changes to your plan.
Your estate is too small
Some believe that if their estate won't be subject to estate taxes (in 2005, your taxable estate must be over $1,500,000 before estate taxes would be owed), there is no need for a will. However, a will's purpose is not to save estate taxes, but to provide for the distribution of your assets, name guardians for minor children, and select an executor for your estate.
All your property is jointly owned
When one owner dies, jointly owned property passes directly to the joint owner, regardless of provisions in a will. Also, the unlimited marital deduction allows you to leave any amount of your estate to your spouse without paying estate taxes. Thus, many married couples use joint property ownership as their sole estate planning technique. However, if your joint taxable estate exceeds the estate tax exclusion amount ($1,500,000 in 2005, but scheduled to increase to $2,000,000 in 2006 and $3,500,000 in 2009), your estate may save estate taxes by distributing some assets to other heirs.
A living trust will distribute your assets
Only assets actually conveyed to the living trust are controlled by the trust document. Typically a pour over will is also needed, which places any asset not held by the trust at your death in the trust.
You expect your estate to grow significantly in the future
Some feel it is premature to plan their estate while it is being built. However, a will can be changed. In fact, you should periodically review your entire estate plan to see if changes in your personal situation, preferences, or tax laws require changes to your plan.
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