I have probably asked every new client over the past 30 years if he or she has a will. It's always a shock to me when people say they don't have one, or that they have one but haven't yet had time to review and sign it.
Wills are not like Internet stocks. They don't give you a "rush" at some point during the day. You never want to get close to seeing the results of your will. Most of us are in denial that we will ever die. In fact, some of us feel deep down that if we start thinking about a will, it may act like a welcome mat at death's door.
Well, I'm like you if you get bothered by all this talk. I really don't like the subject and I don't really want to write about it. But I'm addressing it, not just because it's my duty as a financial planner, but because I've seen some pretty bad results for friends whose family members have passed away without a will. Unexpected death happens!
Your will gives directions and guidance for the disposition of your assets. It takes the guesswork out of how you want to provide for certain people in your life.
What happens when you don't have a will? A probate court has to appoint a representative for your estate, which is then in a condition called "intestacy." In other words, since you didn't have a will, the state steps in and takes over your affairs. This can get expensive, cumbersome and very time-consuming. Each state has its own laws as to who gets what. If there are a spouse and kids, states have various formulas for distribution. Sometimes half the assets go to the spouse and half to the kids. The point is, the state probably won't end up doing it your way, which is why you need to have a will.
In your will, you appoint an executor, whose job is to wrap up all your affairs and see to it that the terms of your will are carried out. You should discuss a lot of practical things with your executor that you may not include in your will. For example, the executor should know which mementos to give to certain people and what funeral home and cemetery to use.
I'll never forget driving my father, mother and sister around a cemetery in Lee, Mass., so my father could pick out a burial site. My dad was a minister, so he didn't consider this a particularly morbid task. He was even humorous about it when he said, "This is the location I want, because it's near the top of the hill and has a good view." Whenever I visit that hill, the view always seems to bring me a sense of peace and contentment.
If you have kids, you need to appoint a guardian for them. You definitely do not want the court doing this for you. The kids may never forgive you if their crazy aunt that they can't stand gets to raise them.
If you don't have a will and want to get one, you'll need to consult with a lawyer. The simplest of wills -- without any associated trusts -- will cost you $200 to $400. Wills with more advanced estate planning run anywhere from $2,000 to $5,000.
In addition to a will, you should consider having a power of attorney, a health care proxy and a living will.
A durable power of attorney is when you name someone -- a relative or close friend -- to handle your assets if you're incapacitated. Another version is a "springing" power of attorney that comes into effect for a particular circumstance, generally health-related. It gives a professional health practitioner the right to determine whether you are no longer able to handle your own affairs. You may stipulate that two or more people have to agree on this opinion.
People should consider a health care proxy, which enables you to appoint a trusted friend or relative to make medical decisions if you are unable to do so. This can include discussions relating to artificial feeding and discontinuing extraordinary means of sustenance -- in other words, pulling the plug.
A living will is generally a document giving one or two doctors the authority to make such decisions apart from the family.
In the following weeks, I will examine a variety of strategies for reducing estate taxes. Next week I'll look at credit shelter trusts.
I am not an estate-planning attorney. Fortunately, in putting together these stories, I have the assistance of someone who is -- Neil Lubarsky of White Plains, N.Y.
Whatever your situation, do not procrastinate on this part of planning. It's practical and important. Have a great week!
Vern Hayden is a certified financial planner in Westport, Conn. He is a financial consultant and advisory associate of Financial Network Investment Corp. He also is an owner of Hayden Financial Group. His column is not a recommendation to buy or sell stocks or to solicit transactions or clients. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks or funds. While he cannot provide investment advice or recommendations, Hayden welcomes your feedback at