Coggins, Larreau & Lythgoe, PC

A Will: The Simplest Way

  The simplest way to ensure that your funds, property and personal effects will be distributed after your death according to your wishes is to prepare a Will. A Will is a legal document designating the transfer of your property and assets after you die. Usually Wills can be written by any person over the age of 18 who is mentally capable, commonly stated as "being of sound mind and memory."

Everyone Needs A Will

  Although Wills are simple to create, about half of all Americans die without one (or intestate). Without a Will to indicate your wishes, the court steps in and distributes your property according to the laws of your state, called Intestacy laws. Wills are not just for the rich; the amount of property you have is irrelevant. A Will ensures that the assets you do have will be given to family members or other beneficiaries you designate.

  Having a Will is especially important if you have young children because it gives you the opportunity to designate a guardian for them in the event of your death. Without a Will the court will appoint a guardian for your children.

Elements of a Will

  Here are the basic elements included in a Will:

•Your name and place of residence;

•Names of spouse, children, and other beneficiaries, such as charities or friends;

•Alternate beneficiaries, in the event a beneficiary dies before you do;

•Specific gifts, such as an auto or residence you want to go to a specific person or charity;

•Establishment of trusts, if desired;

•Cancellation of debts owed to you, if desired;

•Name of an Executor to manage the estate;

•Name of a Guardian for minor children;

•Name of an alternative Guardian, in case your first choice is unable or unwilling to be Guardian;

•A statement that the will is being created voluntarily and not under duress;

•Your signature; and

•Witnesses' signatures.

Preparing a Will

  Start by organizing what you need: outline your objectives, inventory your assets, estimate your outstanding debts, and prepare a list of family members and other beneficiaries. Use this information to carefully consider how you want to distribute your assets. Ask yourself a number of questions, including: Is it important to pass my property to my heirs in the most tax-efficient manner? Do I need to establish a trust to provide for my spouse or other beneficiaries? How much money will my grandchild need for college? Do I need to provide for a child who has a disability?

  Taking inventory of the assets is an important key to making a good Will. Specific assets should be mentioned in your Will. Any items not specifically mentioned may be addressed in a catchall clause of your Will called a Residual Clause which generally states, "I give the remainder of my estate to ..." Without this clause, items not specifically mentioned will be distributed in accordance with state law.

  Outstanding debts usually will be paid by your estate before your beneficiaries receive their shares. You may want to clear up debts that you know will be a problem, or make specific provisions for payment of those debts in your Will.

  Remember to be specific and clear when naming beneficiaries. For example, state the person's full name as well as his or her relationship to you (child, cousin, friend, etc.) so your Executor will know exactly who you mean.

Updating a Will

  You will probably need to update your Will several times during the course of your life. For example, a change in marital status, the birth of a child or a move to a new state should all prompt a review of your Will. You can update your Will by amending it by way of an amendment, called a Codicil, or by drawing up a new Will. Generally, people choose to create a new Will that supersedes the old Will. Always destroy all copies of the old Will after signing the new Will.

Where to Keep Your Will

  Once your Will is written store it in a safe place that is accessible to others after your death. Make sure a close friend or relative knows where to find your Will. Your attorney who prepared your Will should retain a copy with a note stating where the original can be found.

Estate Taxes

  The property included in your Will may be subject to taxation, so please consider the following:

•Federal estate taxes will generally be due if the net taxable estate is worth more than $1,500,000. This amount is scheduled to gradually increase from $1,500,000 in 2004 to $3,500,000 in 2009 so that it will eventually shield $3,500,000 in gift or estate transfers from tax per taxpayer. Estates in excess of the exempt amount can be taxed at a rate beginning at 37%. Also, note that these estate tax changes are scheduled to be repealed in 2010. If not extended, the tax law will revert to the estate and gift tax provisions in affect 2001, which allowed $1,000,000 to pass without taxation. Your attorney can refer you to a qualified tax or financial professional to determine what is right for you and your family.

•Federal income taxes

•State income taxes

  You may be able to minimize your estate tax by establishing a trust or giving gifts during your lifetime.

Plan Ahead

  The end of your life is something you probably do not want to dwell on, but thinking about what will happen to your loved ones, your assets and your personal possessions is important. Making sure you have done all you can to make their lives easier will give you peace of mind, and once your Will is drafted you won't have to think about it again unless something significant in your life changes. You should also consider having a Living Will and a Durable Power of Attorney for Health Care drafted at the time you create your Will.

A Living Will

  A Living Will is not a part of your Will. It is a separate document that lets your family members know what type of care you do or do not want to receive should you become terminally ill or permanently unconscious. It becomes effective only when you cannot express your wishes yourself. The State of Utah also recognizes a Durable Power of Attorney for Health Care, which allows you to designate another to help make health care decisions for you if you are unable or unwilling to make those decisions yourself.

Naming an Executor

  The Executor is the person who oversees the distribution of your assets in accordance with your Will. Most people choose their spouse, an adult child, a relative, or a close friend to be Executor. In some cases a trust company or an attorney may be chosen to fulfill this duty. You should expect your estate to pay an independent executor for this service, however, this rarely occurs if a spouse, relative, or close friend is appointed Executor.

  If no Executor is named in a Will, a probate judge will appoint one. Probate refers to the legal procedure for the orderly distribution of property in a person's estate. The Executor files the Will in probate court, where a judge decides if the Will is valid. If it is found to be valid, assets are distributed according to the Will. If the Will is found to be invalid, assets are distributed in accordance with state Intestacy laws.

  Responsibilities usually undertaken by an Executor include:

•Paying valid creditors and taxes;

•Notifying Social Security and other agencies and companies of the death;

•Canceling credit cards, subscriptions, etc.;

•Distributing assets according to the Will; and

•Performing any other duties necessary to settle the decedent’s affairs.

Naming a Guardian

  In most cases a surviving parent assumes the role of sole Guardian. However, it is important to name a Guardian for minor children in your Will in case neither you nor your spouse is able and willing to care for the children or you are divorced and you believe someone other than the surviving parent is the best person to care for the children. The Guardian you choose should be over 18 and willing to assume the responsibility. Talk to the person ahead of time about what you are asking to ensure that the person is willing to assume the responsibility of being a Guardian. You can name a couple as Co-Guardians, but that may not be advisable. It is always possible the Guardians may choose to go their separate ways at some later date, and, if so, a custody battle could ensue. If you do not name a Guardian to care for your children, a judge will appoint one and it may not be someone you would have chosen.

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