How to use this tool
How to use this tool
Do You Really Need a Will?
by Roger Wohlner (Write for us!)
(Click on the links within the article to get definition of that word)
(Click on the links within the article to get definition of that word)
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.
Email this Article
Print this Article
Cite this Article
Other Suggested Articles
Advance Directives: Make Your Wishes Known >
What is a Trust? POA? Living Will? >
What Is a Simple Will and Why Might I Need One? >
Ethical Wills >
Four Important Documents That Can Ensure You Retain Control >
Other Articles By This Author
Handling the Family's Finances >
Your Children and IRAs >
How Do We Measure Inflation? >
A Look at P/E Ratios >
Are Muni Bonds Appropriate for You? >
Reevaluate Your Life Insurance at Retirement >
Tips to Consider for Your Estate Plan >
Don't Sabotage Your Financial Goals >
Should You Elect Early Social Security Benefits? >
Tips to Maximize Your Financial Aid Reward >
Article reprinted with permission. Unauthorized reproduction of this content is prohibited.
Click here to license InvestorGuide University content.
Click here to license InvestorGuide University content.
