Writing a Will - a $200 Investment to Save You Thousands

Estate planning is a lot like retirement savings – a little investment now will grow into immense value later on. Estate planning is usually very simple, cost effective, and can save your loved ones thousands of dollars and broken hearts. Unortunately, it suffers from a naming problem that has surrounded the process with misunderstanding and false perceptions.

Bad Name = Misunderstood Service

Estate planning is the process of creating legal documents to dispose of your property after death. For many, estate planning has a bad reputation - it’s too complicated, too expensive, only for rich people…and is surrounded with misunderstandings because it has a deceiving name. Let’s face it, most of us don’t have an “estate” and even our homes might be underwater. If they called bologna what it really is would your kid really want it for lunch? Well, estate planning probably suffers from a naming problem; it would be better if we called it “gift describing” or “property planning” because then it would be more approachable and the regular Joe would have a better grasp of the purpose.

What’s in an Estate Plan?

Most people’s estate plans involve a simple will. At the most basic level, your will tells your survivors what property goes where. If you don’t have a will, your property gets divided according to state law (intestacy statutes) and flows to your heirs. While it is somewhat reassuring to think that everyone has a default estate plan, these default conditions can (often) cause unwanted consequences. For example, intestacy laws can give an inheritance to an estranged family member or a “laughing heir” – someone you are related to by blood but have never met before. These laws can also force the break up the family farm and create tax problems.

Your will also describes your intentions. Sometimes people have a family heirloom, a collection, or a family cabin which they wish to stay whole and be used that way by their family. Without a will to describe your intentions, intestacy laws can force the breakup of a treasured collection or cause the cabin to be sold because there aren’t any liquid assets (cash) to pay creditors. So long as you have a will and plan correctly, these problems can be avoided.

One final and common component of a will is the nomination of a guardian for minor children. A will allows the writer to nominate someone to care for their minor child if they were to die. While the law favors the surviving parent (and this would most likely be uncontested), there are circumstances where there is no surviving parent or the surviving parent is unwilling or unable to parent the child and the court would be looking for direction on who to care for the child. A third possibility is that the will writer believes the other biological parent is unfit to parent, perhaps because of abusive behavior or addiction. Regardless of the reason, by nominating a guardian you tell the court who you want to look after your child. The law respects this nomination on the basis that "mother (or father) knows best."

How to Plan

You need to call a lawyer, come to a short meeting where you describe your wishes (and answer a few questions), and spend a couple hundred dollars – that’s it. A lot of people in recent years have bought kits online or from a bookstore or stationary shop. While these are a bit less expensive, they are rife with unforeseen and disastrous consequences. For example, sometimes kits attempt to allow the writer to do something which is actually illegal or impossible. For example, a will must be signed in a particular way, and if it is not, it is just a piece of paper with words on it having no legal effect. Another major drawback of a cookie-cutter will kit is that you don’t get any advice from the form – it is just you and the words. You go to a lawyer expressly to get that advice – to get a plan that is tailored to your individual needs – and if you are taking the time to write a will to describe your intentions, you probably want those intentions to actually take effect. 

A lot of kit wills (and some unethical lawyers) also push the use of living trusts. While trusts are a powerful and useful tool, in many cases they have no advantage and only create unwarranted expenses to create, and evenn greater expenses to manage. "Living Trust Mills" - lawyers and firms that pushed unwarranted use of trusts - have become such a problem that the Minnesota Attorney General's office actually created a brochure to help consumers make sound decisions. Given the current state of the law and the economic conditions for most of the clients I see, a simple will is often times all that is needed – and what is more, in estate planning, simplest is best.

If you are like me, you have already given up on your New Year’s resolution so you should be able to make a new one – make an “gifting plan.” Step one, call a lawyer.

You can reach me at 952-445-2817 or jconway@jmwlaw.com.