Research has shown that more than half of all American adults don’t have a will, and that can cause all kinds of problems if tragedy strikes.

The death of both parents in an accident can leave their children’s fate up to a judge. Assets in a blended family may not end up being distributed the way you would like. And, if you’re incapacitated but not killed, the choices made about your medical care may not be those you would want.

Estate planning can save you from all those unfortunate outcomes. Nearly everyone should do some basic estate planning, even those with few assets.

“Spending a little time to get all your affairs in order is one of the best gifts you can give your family,” says Stephen White, regional leader of wealth planning for BMO Wealth Management in Milwaukee.

If you die without a will, state law determines who gets your assets. If you’re single and childless, that may mean your estate goes to your parents or your siblings.

If you’re married, your assets may all go to your spouse, or be split between your spouse and children of another marriage. If you’re part of an unmarried couple, your estate goes to your biological family, not your partner. In many cases, this may not be what you want.

“I think it’s important for people to think about what happens if they don’t have a will in place,” says Bob Phillips, managing partner of Spectrum Management Group in Indianapolis. “There’s one written for you by the state.”

Estate planning is especially important for unmarried couples and blended families. State law awards assets to biological relatives if there is no will and an unmarried partner will be shut out.

Read Also: How to Create an Estate Plan

Blended families may want to split assets between current spouses and children of previous marriages, or they may not. “There’s always a way to find a way to have the assets flow the way you want to if you plan it in advance,” Phillips says.

Even after you’ve put together an estate plan, either by yourself or with the aid of someone like this will writing Chipping Norton service, you should review it from time to time based on changes in your life, but everyone should check at least every five years.

Heirs may have died or remarried, or the person you chose to administer your estate may no longer be capable. If you marry or divorce, you should review your estate plan, too.

Once you’ve created a plan, make sure your heirs know where to find the documents. You can keep them in a strongbox at home or in your lawyer’s vault, or both.

“One place you should not keep these is in a safe-deposit box in a bank,” says E. Richard Baum, partner at Anchin, Block & Anchin in New York. Your heirs may not be able to get to them immediately. “Death freezes everything,” he says.

Exactly what you need in your estate plan depends on your assets and your family situation. Business owners will need a succession plan, and parents of children with special needs may need to set up a special needs trust.

But options exist for people of all income levels, no matter how you would like your assets distributed after your death.

The information above is just a tip of the thing you need to know when it comes Estate planning. We share some of them in this article

• 10 Things you Never Knew about Estate Planning
• What should you never put in your Will?
• What are the four Important Estate Planning Factors?
• What Should you Know about Writing a Will?

10 Things you Never Knew about Estate Planning

According to Forbes.com Estate planning can be defined as the process of legally structuring the future disposition of current and projected assets. It is the act of preparing for the transfer of a person’s wealth or assets after their death. Here are ten quick facts about Estate planning.

1. Estate planning is not only for the rich and affluent

Estate planning comes into consideration when you have something of value you want to pass on to your relatives and loved ones which could be cash, properties, investments etc.

Middle class families also have several things of value that they t need to pass down to their offspring so they also require a proper statement of their intentions.

2. A lack of an estate plan could wreak disastrous consequences upon the family

Stories abound in some cultures of the siblings of a deceased person taking over their brother’s property to the detriment of his wife and children. There have also been cases of siblings fighting each other in the media and the law courtsbecause of property. Surely, no one would love this to happen to their family hence the need for a proper estate plan.

3. It ensures there is no ambiguity about your intentions

Sharing of assets should not be based on assumptions; rather it should be based on specific instructions as to who gets what from the estate. Without a proper estate plan in place a lot more people may lay claim to the deceased’s possessions.

4. Your assets can be easily and quickly transferred to your beneficiaries

Putting a good estate plan in place will ultimately benefit your heirs as it aids them to gain control of your assets in a shorter time than it would without one.

In fact claiming inherited assets without estate planning can be a harrowing experience as it may take several years in probate court and administration before there can be access to the value in those assets.

5. Ensure your business interests continue running smoothly

Who is going to take over the running of your business interests on your demise? This is probably one of the most stressful issues to decide. Now you might have siblings and a spouse but there is a good chance that none of them has what it takes to run your enterprise.

Now this is where Estate planning could be useful. You could stipulate that the trust runs your business and provides returns to your loved ones, thus giving your business interests a much better chance of existing for many more years.

6. Estate planning is a complex but rewarding process

Now wills, trusts and power of attorney are some of the documents used in proper estate planning that is backed by law to enforce one’s wishes and decisions.

The process however requires a statement of one’s objectives and intentions for loved ones. Estate planning is the responsibility of professionals.

7. Minimise Expenses

Good estate planning can keep the cost of transferring property to beneficiaries as low as possible, leaving more money for your beneficiaries.

8. It has many advantages even while one is still alive

While many see estate planning as a useful tool when one is no more it can also come in handy to plan for unforeseen eventualities, such as when one in incapacitated due to illness and needs to pay for one’s medical care. It can also include a pre-paid funeral plan.

9. Plans must be subject to constant review

An important consideration to remember about estate planning is that your estate plan should be reviewed at least periodically and whenever a life event occurs.

Estate planning can be an ever-changing, evolving process. Laws can change. People can change. Assets can change. Because of these things, it is important to revisit your estate plan regularly to consider updating.

10. A larger chunk of your assets will go to the government without an estate plan

Decisions on who gets what from your estate will be the responsibility of the government if you are without an estate plan. Your assets will not be shared based on your intentions.

This process can take a long time to decide and you can be sure the tax man will be getting a better than fair deal on your assets by getting higher taxes when they take decisions on your behalf.

Stop spending more time planning vacations, parties and many other events without taking time to plan the future use of your assets if something happens.

What should you never put in your Will?

Some people use their Will to have a last laugh, or maybe to leave a poignant message to someone they’ve left behind. William Shakespeare apparently left his wife his ‘second best bed’, while Napoleon Bonaparte requested his head be shaved and his hair distributed among his friends.

Whether you’re planning a Will, which will be fairly standard or out of this world, there are some things you just cannot include. Here’s what not to put in your Will.

• Joint accounts: Any funds in your joint account will go to the surviving account holder
• Joint tenancy property: Again, your half will go to the surviving tenant
• Pension benefits: These will usually go to your spouse according to the conditions of the scheme
• Life insurance: Unless you have written your life insurance into your ‘estate’, it will automatically be paid to the beneficiary upon your death
• Business partnership: It’s unlikely you’ll be able to transfer your share in a business to someone else without the consent of the surviving partner(s)
• Anything you don’t own: Obviously you cannot gift anything that is not entirely yours, so leased vehicles, hire purchased items etc. cannot be included.

There are some things which aren’t an absolute no, but you should be wary about including, or at least be very careful with your wording. These include:

• Wishes: Your wishes are important to you and make up the legacy that you leave future generations of your family with, but this is not covered in your Will. If you have specific wishes that you want your Executor to carry out when you are gone, then you really need to pass them on outside of your Will. You can use Lexikin and our Wishes section to manage this and leave the legacy you dream of.
• Conditions: Any gifts which have a condition attached such as marriage or divorce are not legal to include in a Will. You can make encouragements in the Will, for example “To Jenny, for when she graduates from University” or “To Simon, for him to use as a music studio”. Bear in mind there will be nobody to police this after you’re gone unless you have the resources to pay an Executor(s) fee.
• Gifts for pets: You might love your dog more than anyone else in the world, but pets do not have the capacity to own property, so think twice about leaving Rex the holiday home. Think instead about leaving the pet with someone you trust to look after them well, and possibly put some money aside to pay for the pet’s care or donate to animal charities.
• Funeral arrangements: Your Will needs to go through Probate before it can be released to your loved ones and your Estate can begin to be settled. Funeral arrangements are one of the first things that will happen after you die, so if you leave your funeral wishes in your Will, it’s unlikely your loved ones will get to see them in time. Instead, make a funeral plan that can be given to them immediately after you pass. In addition, it can be wise to have final expense insurance (read all about final expense insurance here) to ensure that funeral arrangements and any remaining medical or legal expenses can be covered and are not a burden financially to family members. 

Aside of these things, you are free and able to gift anything you own to anyone you like, but it is important to always bear in mind what not to put in your Will.

What are the four Important Estate Planning Factors?

The topic of estate planning is one that most people aren’t comfortable talking about. While most don’t want to consider what’s going to happen after death, it is critical to do so if you have possessions or financial assets you’d like to leave to your family and friends. 

Creating an official and legalized plan ensures that your wishes for the distribution of your assets are carried out.

There are four main elements of an estate plan; these include a will, a living will and healthcare power of attorney, a financial power of attorney, and a trust. 

1. Last Will and Testament

An estate plan commonly includes a last will and testament, commonly known as a will, sometimes handled through probate, which outlines your wishes for the assets that you own at your passing. It allows you to name the people you’d like to leave something to upon your death.

In most states, without a will, your assets follow a process called probate, in which the state determines how your assets are distributed based on state law. A will allows your assets and family to skip the probate process and be distributed as you wish.

As you are creating your plans to leave your possessions to family and friends, consider discussing your plans with a few of your closest and more trustworthy heirs to alleviate any issues or disagreements that may present themselves after you pass.

It is best to draw up your will when you have significant life changes, such as getting married or divorced; once you have a child it is imperative to create a will and establish a chain of legal guardianship for your child if something were to happen to both parents.

Your circumstances dictate a suitable place to create your will. If you are single, some online resources such as LegalZoom can be suitable. 

When your life becomes a more complex—a spouse, children, a small business, financial assets—it is usually a good idea to speak to an estate attorney. 

2. Healthcare Power of Attorney and Living Will

A healthcare power of attorney (HPOA) is a signed legal document in which you name a single person as your healthcare decision-maker in the event that you can’t make decisions yourself. 

A living will, also known as an advanced medical directive, outlines your wishes regarding medical care in the event that you are incapacitated, terminally ill, or unable to communicate. 

This is a statement of your wishes as they relate to decisions about life support and any kind of life-sustaining medical intervention that you do or don’t want.  

It is generally best to get these documents drawn up at the same time as your will.  If you have specific requirements that need detailed documentation, seeing an estate attorney is more suitable.

3. Financial Power of Attorney

Similar to the healthcare power of attorney, a financial power of attorney outlines who you want to make your financial decisions on your behalf should you become incapacitated. 

Without this document, no one will have the authority to step in and handle bill-paying, investment decisions, or other financial matters.

Like the HPOA, it’ best to create this document at the same time as your will. If you have specifications or large financial assets that require detailed financial documentation, it’s best to see an estate attorney.

4. Establish a Trust

A trust is a legal entity that can own your assets (while living or at death) and be controlled based on your wishes outlined in the legal document that created the entity. For example, a trust would allow you to dictate how you wanted your child to benefit from your assets throughout their life. 

You may want to include stipulations that assets are used in a certain way or received at a certain time. A trust is a way to protect assets from being used in a way that you would not see fit if you were in control of them.

There are several advantages to having a trust, however, it is not necessary unless you are worried about the oversight or care of your assets at your passing. Ultimately, you are trusting your heirs to manage and use your assets properly should you pass away.

If you have a sizeable insurance policy or estate and/or children, a trust is worth discussing with an attorney to determine the right parameters and language for your situation. 

Is your estate planning in order? If not, you should consider getting these important documents in place as soon as possible. 

You want to ensure that your assets are distributed and that your descendants are cared for in the manner that is best for them when you’re gone—while assuring yourself you’ve done all you can.

What Should you Know about Writing a Will?

Writing a will isn’t the most pleasant of tasks. After all, by doing so you’re not only acknowledging your own inevitable demise but actively planning for it.

That might explain why so many adults avoid this cornerstone of estate planning. According to an AARP survey, 2 out of 5 Americans over the age of 45 don’t have a will.

But creating a will is one of the most critical things you can do for your loved ones. Putting your wishes on paper helps your heirs avoid unnecessary hassles, and you gain the peace of mind knowing that a life’s worth of possessions will end up in the right hands.

“A will is an important way you can stay in control over who gets what of your property,” says Sally Hurme, an attorney with AARP, “and by planning in advance you can also save your family time and money.”

The laws governing wills vary from state to state. If you aren’t familiar with them, consider consulting a knowledgeable lawyer or estate planner in your area.

Before you do, brush up on these 10 things you should know about writing a will.

What is a will?
A will is simply a legal document in which you, the testator, declare who will manage your estate after you die. Your estate can consist of big, expensive things such as a vacation home but also small items that might hold sentimental value such as photographs.

The person named in the will to manage your estate is called the executor because he or she executes your stated wishes.

A will can also serve to declare who you wish to become the guardian for any minor children or dependents, and who you want to receive specific items that you own — Aunt Sally gets the silver, Cousin Billy the bone china, and so on. Someone designated to receive any of your property is called a “beneficiary.”

Some types of property, including certain insurance policies and retirement accounts, generally aren’t covered by wills. You should’ve listed beneficiaries when you took out the policies or opened the accounts.

Check if you can’t remember, and make sure you keep beneficiaries up to date, since what you have on file when you die should dictate who receives those assets.

What happens if I die without a will?

If you die without a valid will, you’ll become what’s called intestate. That usually means your estate will be settled based on the laws of your state that outline who inherits what. Probate is the legal process of transferring the property of a deceased person to the rightful heirs.

Since no executor was named, a judge appoints an administrator to serve in that capacity. An administrator also will be named if a will is deemed to be invalid. All wills must meet certain standards such as being witnessed to be legally valid. Again, requirements vary from state to state.

An administrator will most likely be a stranger to you and your family, and he or she will be bound by the letter of the probate laws of your state. As such, an administrator may make decisions that wouldn’t necessarily agree with your wishes or those of your heirs.

Do I need an attorney to prepare my will?

No, you aren’t required to hire a lawyer to prepare your will, though an experienced lawyer can provide useful advice on estate-planning strategies such as living trusts.

But as long as your will meets the legal requirements of your state, it’s valid whether a lawyer drafted it or you wrote it yourself on the back of a napkin.

Do-it-yourself will kits are widely available. Conduct an Internet search for “online wills” or “estate planning software” to find options, or check bookstores and libraries for will-writing guides. Your state’s departments of aging also might be able to direct you to free or low-cost resources for estate planning.

And while you’re working on your will, you should think about preparing other essential estate-planning documents. “When you create or update your will, that’s also a good time to think about other advance-planning tools like financial and health care powers of attorney to ensure that your wishes are carried out while you’re still alive,” says Naomi Karp of AARP’s Public Policy Institute.

Should my spouse and I have a joint will or separate wills?

Estate planners almost universally advise against joint wills, and some states don’t even recognize them. Odds are you and your spouse won’t die at the same time, and there’s probably property that’s not jointly held.

That’s why separate wills make better sense, even though your will and your spouse’s will might end up looking remarkably similar.

In particular, separate wills allow for each spouse to address issues such as ex-spouses and children from previous relationships. Ditto for property that was obtained during a previous marriage. Be very clear about who gets what. Probate laws generally favor the current spouse.

Who should act as a witness to a will?

Any person can act as a witness to your will, but you should select someone who isn’t a beneficiary. Otherwise there’s the potential for a conflict of interest. The technical term is a disinterested witness. Some states require two or more witnesses. If a lawyer drafts your will, he or she shouldn’t serve as a witness.

Not all states require a will to be notarized, but some do. Check. You may also want to have your witnesses sign what’s called a self-proving affidavit in the presence of a notary.

This affidavit can speed up the probate process because your witnesses likely won’t be called into court by a judge to validate their signatures and the authenticity of the will.

Who should I name as my executor?

You can name your spouse, an adult child, or another trusted friend or relative as your executor. If your affairs are complicated, it might make more sense to name an attorney or someone with legal and financial expertise. You can also name joint executors, such as your spouse or partner and your attorney.

One of the most important things your will can do is empower your executor to pay your bills and deal with debt collectors. Make sure the wording of your will allows for this, and also gives your executor leeway to take care of any related issues that aren’t specifically outlined in your will.

How do I leave specific items to specific heirs?

If you wish to leave certain personal property to certain heirs, indicate as much in your will. In addition, you can create a separate document called a letter of instruction that you should keep with your will.

A letter of instruction, which isn’t legally binding in some states, can be written more informally than a will and can go into detail about which items go to whom.

You can also include specifics about any number of things that will help your executor settle your estate including account numbers, passwords and even burial instructions.

Another option is to leave everything to one trusted person who knows your wishes for distributing your personal items. This, of course, is risky because you’re relying on this person to honor your intentions without fail. Consider carefully.

Where should I keep my will?

A probate court usually requires your original will before it can process your estate, so it’s important to keep the document safe yet accessible.

If you put the will in a bank safe deposit box that only you can get into, your family might need to seek a court order to gain access. A waterproof and fireproof safe in your house is a good alternative.

Your attorney or someone you trust should keep signed copies in case the original is destroyed. Signed copies can be used to establish your intentions.

However, the absence of an original will can complicate matters, and without it there’s no guarantee that your estate will be settled as you’d hoped.

How often does a will need to be updated?

It’s possible that your will may never need to be updated — or you may choose to update it regularly. The decision is yours. Remember, the only version of your will that matters is the most current valid one in existence at the time of your death.

With that in mind, you may want to revisit your will at times of major life changes. Think of pivotal moments such as marriage, divorce, the birth of a child, the death of a beneficiary or executor, a significant purchase or inheritance, and so on.

Read Also: How to Plan Inheritance for Children of Blended Families

Your kids probably won’t need guardians named in a will after they’re adults, for example, but you might still need to name guardians for disabled dependents. A rule of thumb: Review your will every two or three years to be safe.

Who has the right to contest my will?

Contesting a will refers to challenging the legal validity of all or part of the document. A beneficiary who feels slighted by the terms of a will might choose to contest it. Depending on which state you live in, so too might a spouse, ex-spouse or child who believes your stated wishes go against local probate laws.

A will can be contested for any number of other reasons: it wasn’t properly witnessed; you weren’t competent when you signed it; or it’s the result of coercion or fraud.

It’s usually up to a probate judge to settle the dispute. The key to successfully contesting a will is finding legitimate legal fault with it. A clearly drafted and validly executed will is the best defense.