Whys, Hows, Whens Of Wills

Including How To Make Your Own; Ray Martin Offers Detailed Guidance

(CBS)  While the importance of wills is generally understood, you'd be surprised how many grownups in Amerixa don't have one. In this column, Early Show money maven Ray Martin says that can be a big mistake, and gives details on all aspects of will-making.

It's estimated that about 60 percent of U.S. adults don't have a will. It's understandable. No one likes to think about his or her own death, much less plan for it. A lot of folks think they don't have enough money to need one. And some folks just don't have the money to pay for the high price of legal advice and service to write a will. As proof, a smaller percentage of people with incomes below $75,000 has a will as compared to folks with higher incomes.

Most people know this is important, but may not think it's something they need to do until they're older or wealthier. But financial advisers will tell you this is not something you put off.

A will - formerly called a Last Will and Testament - is a written document typically prepared by an attorney, in which you (the writer or testator) specify how and to whom your property will be distributed. In a will, you also nominate guardians of minor children and name a personal representative and even direct trusts to be established for supporting children, education, or other special needs.

If you do not have a will, the courts will decide who will be the guardians of any minor children. This is typically the other living parent. But if there is no living parent (or the living parent is unfit or unwilling) the courts will appoint a guardian. If you want to nominate one, you need a will.

Also, without a will, your state's laws will determine how your property will be distributed. Most states divide assets by leaving a-third to half to the remaining spouse and the rest to any children or relatives. Some states even require leaving a share to the unborn child of an expecting spouse. If you pass away with a spouse and children and you have no will, your state's laws could leave your children and other relatives a larger share of your property than what is given to your spouse. That's hardly acceptable for most families, who may want all assets to go to the surviving spouse for use to support the families living expenses. The way to avoid relying on your states 'one size fits all will' is to write one of your own.

Who Needs a Will?

If you're single, have only a few assets -- a bank account, a car and little else -- you can probably do without a will for now. Even young couples with no children and modest assets, who title their accounts and home jointly and list each other as beneficiaries on retirement accounts and life insurance, can probably get by without a will. But even if this is your situation, if you care about how your property is distributed if you both pass away, then you will need to get a will.

Writing a Will
Writing a will for a simple situation isn't particularly complicated and you do not need an attorney to do it. Any adult of sound mind can make out a legal will. You can hand write it, prepare it using a computer program or use a legal document service. A basic will should include the following:
• Your name and address
• A statement that this is your last will and testament and that any prior wills are revoked.
• There should also be a declaration that the person establishing the will is legally competent and of sound mind. A will made under duress or during questionable capacity can be challenged or invalid.
• The name of your personal representative or executor -- the individual who has the responsibility to gather all financial information, keep records, pay debts and taxes and make final distributions. It's a big job, so chose carefully. Spouses typically chose each other, but you'll need to designate a back up to serve if both of you pass away.
• A direction that your personal representative will pay your debts and taxes.
• Include specific distributions of property, if any; special gifts of property to specific individuals, such as a gift of a piece of jewelry to a sibling.
• A provision to distribute remaining property to a spouse, children and/or other persons.

• Nominate a guardian or guardians: the individual(s) who will take care of any minor children. For many people, it's important to choose someone whose sense of values and beliefs are as close to their own as possible. Some people put off getting a will because they can't make that difficult decision. Don't get hung up here. Do the best you can. It's an easy process to change this portion of a will by a simple amendment called a codicil. It's best to limit the use of codicils to minor revisions to a will. Also, be aware that your selected guardian can decline the honor, so it's a good idea to also designate a backup.
• At least two witnesses (three in some states) must sign a statement that they observed you sign of the will. Make sure the witnesses are not beneficiaries under the will. If so, they may be disinherited.