As our lives change, so does our need to update important financial documents. Having an updated will, power of attorney and advance health directive is a good start. But thoughtful beneficiary planning and centralized, digital storage of financial information are also critical pieces of the end-of-life organizational puzzle. Further, taking the time to get these items in order shows selflessness and love for family, friends and the organizations we support. This is Part One of a series dedicated to providing clarity about the importance of creating, storing and sharing our end-of-life wishes regarding our property and assets.
Part One: Last Will & Testament
According to Gallup’s polling, less than half of U.S. adults have a will that describes how they want their assets to be handled after their death. Surprisingly, even people ages 50-64 are “underwilled,” with only 53% of this cohort protected by a will.
While my family was on vacation in New Hampshire recently, even the priest at Sunday Mass brought up the importance of “getting your affairs in order” with wills, advance directives and a financial power of attorney. “It is extremely selfish not to address these issues,” he said. “We’ve all been in situations where a loved one passes and we struggle to figure out what their desires were regarding assets. Even worse, in many cases we don’t know where the assets are.” That’s the truth. Having a will and associated documents in place can ease the burden on family members who often struggle with the emotional and financial impact of the death of a loved one.
In its most basic form, a last will and testament is a legal document that allows you to express your wishes as to how your assets will be distributed after your death.
A will gives you control over what happens to your property and specifies final wishes regarding your affairs. It covers who is responsible for distributing your assets to your beneficiaries, and can allow you to name guardians for your dependents if they are minors at the time of your passing. A will makes your wishes clear and explicit during an emotional and chaotic time and eases some of the stress on family members. Remember that if you don’t make your wishes clear in a will, your state probate court will decide for you!
Online Will Options and Costs of Creating a Will
Fortunately, creating a will, especially if your estate and financial situation is relatively uncomplicated, is fairly simple. In 2022, there are many online choices, including LifeLegacy, which offer a basic digital will, advance directive and financial power of attorney that can be completed in less than 15 minutes if you know what assets you have and to whom you’d like to pass them. LifeLegacy even offers a charitable giving component, allowing you to choose a charity or charities to designate as participants in your estate. Even life insurance comes into play on the LifeLegacy site, with the option to buy a permanent policy in minutes to support a cause you are passionate about and/or to leave a legacy to your children. Costs for completing a legally-sound online can vary drastically with some platforms offering no cost options and others charging upwards of $250.
Using an attorney for more complex needs is generally a good idea. Jack Hales, an estate and probate attorney at Hales and Sellers, commented on this topic to Business Insider. “At the absolute lowest end, if you need a simple will [prepared by an attorney], powers of attorney, and nothing fancy, it’ll cost $750 for an individual. For a married couple, it’s $1,200. Once you get into setting up an estate plan with a revocable trust and more, it’ll cost at least $3,000. And then, depending on your assets, you may add a few extra hundreds or thousands.”
It is important to note that specific assets like property, real estate, valuables, etc. are typically identified in a will, but financial accounts are not. This is because accounts like savings accounts, 401ks, investment accounts and the like usually have their own beneficiary designations which override any directives provided in a will. According to Edelman Financial Engines, “regardless of what your will says, whoever is named as the beneficiary on each account is who will receive that asset. Period. Your will only provides instructions for how you wish to distribute the remaining assets in your estate, of which the accounts with beneficiaries are excluded. Therefore, a beneficiary designation supersedes what is in your will.”
Next Up: Advance Health Directive, Financial Power of Attorney, Beneficiary Designations, the Life Insurance PolicyLocator Service and where to safely and digitally store all this stuff!