Consumer Survival Kit; 306; Wills and Estates

Consumer survival kit wheels and a state number three hundred in s. The Maryland Center for Public Broadcasting. For Public Broadcasting. No. Hello I'm Larry Lohmann. Have you ever sat down and figured out how much you're worth in dollars and cents. Chances are by the time you figure the value of your house and the stocks and bonds you may have the face value of your life insurance your car and other personal property you're probably worth a lot more than you think. Now answer this question. Have you

drawn up a will. If the answer is No you may be giving your property away to relatives you never intended to have it. What's more without careful planning you may be leaving the ones you do care about with the tax burden that could have been substantially reduced. If you are concerned about the welfare of the loved ones you leave behind. We have a lot to talk about and making a will is just part of it. The financial decisions you make about your home and property can make a big difference when it comes to your family's well-being. After your death. With that in mind will help you plan the right strategy. Bob Smith will take a look at trust funds and help you decide whether to include one in your game plan. If I can we'll be talking with Lynn Kane author of Widow about how to organize things to make it easier for your family after you've gone. We'll also look at the joint ownership of property guardianship of your children. And lots more. First a few questions. Number one if you and your spouse jointly own all of your property you don't need a will your faults. Number

two you cannot disinherit your spouse. True or false. Number three in order for a will to be valid. A lawyer must prepare it. Your thoughts. How do you do. Number one his faults even if you and your spouse jointly own all of your property you should have a will. Your joint ownership probably entitles your spouse to receive full ownership of the property if you should die first. That provision is called the right of survivorship. But what happens to that property if both you and your spouse should die in a common accident. We know that's an unpleasant thought but here's the point. If there's no will you could be leaving your heirs an enormous headache in straightening out your estate and relatives you haven't seen in years could well end up with property you intended for your children. More importantly if you are survived by small children the court would have to find a guardian to look after them if you had a will. You could name the Guardian yourselves. More on that later. It's also important that you and your spouse should each have a will. That way there's no confusion over who

is entitled to what no matter when or how you go. Number two is true. You cannot do this inherit your spouse unless there's a clear case of abandonment. The courts will see that your spouse gets his or her legal share of your estate. Now in most states that's a third. In other states it's half if you say in your will that your spouse should get only 20 percent of your estate. The courts will probably award the legal share if he or she contests. By the way you can disinherit your children but in some states if you want to disinherit your son for example you must specifically say so in the will just leaving him out. Probably won't do the job. Number three is false. In order to be valid a will does not have to be prepared by a lawyer but it should be. One Well that was written on a door was declared valid by the court. But that's a rare example. A will can be contested on scores of legal grounds. If you want yours to be unassailable after your death have it drawn

up by a lawyer and preferably one specializing in wills and estates in addition to drawing up your will. A lawyer will counsel you on tax matters and estate planning. Now how do you find a good lawyer. You might try calling the trust department of your bank. They should be able to refer you to at least three lawyers with experience in wills and the State's or the going rate for making a Will starts at 50 to 100 dollars and goes up with a degree of complexity. You may be entitled to legal services at reduced fees. Many unions and professional groups offer prepaid legal services to members. That means the organization pays part of the legal fees for services that include making wills. Also check your local lawyer referral service usually run by the local bar association. This group should put you in touch with a lawyer but be sure to ask if he has substantial experience in wills and estates. Virgil Hornsby here.

You wanted to see me. That's good that's good without him will you die intestate. Intestate is the legal term for dying without a will. Yeah well that's why. Well first we need to figure out how much property you have. Not for books. You're just wrong. Homeowners are property going for the courts you know what I mean probate Trouble used to flare up on me. Oh no I mean probate court. Yeah you see after your death just distribution of your state will go through probate court.

Yeah well I want to keep that to a minimum you know. Well with some careful planning we can keep it to a minimum. Stuff should go to somebody's head right. It's like oh whatever happened to guys like Tony. Oh I want to remember they got elected. OK I got it. You know me. Yeah me there. Dying in testate without a will can mean major problems for the family you leave behind. For example suppose a husband dies leaving behind a wife and two young

children and no will the courts will divide most of the estate among the immediate family but there's no guarantee that the wife will control what's awarded to the kids every time she needs some of that money for school for the kids clothes or anything else she could have to go to court. A will would prevent this inconvenience and legal expense. Probate is the legal process during which your estate is settled in the eyes of the law and usually takes at least four to six months and sometimes longer while your estate is going through probate. Most of it is frozen. That is your family can't get their hands on it for quite a while after your death. Many states do permit an allowance to be taken from the estate during probate for the family to live on. Unfortunately that allowance is sometimes too small so providing sufficient funds for your family during this period may be one consideration in your planning. Keep in mind that some of your property can be passed straight on to your survivors without having to go through probate. Life insurance benefits all jointly

owned property with right of survivorship and some trust funds are examples. Your lawyer can advise you on probate. How in your will you'll name an executor in some places known as a personal representative. This person will have some important responsibilities. He or she will have to file the will notify all your creditors that the estate is being closed. Make an end and Torrie of all your assets. Collect all monies owed to you at the time of death. And file state inheritance and federal estate tax statements. Among other things this is a big responsibility and you should choose the executor with care. It should be someone with experience in financial matters. Someone who is likely to survive you and not likely to move away. Your lawyer may also advise naming an alternative executor just in case. And by the way your executor is entitled to a fee for his services which comes out of your estate and depending on how you write your will he or she may have to post bond to have none of your

friends or relatives fills the bill. You can name a lawyer as your executor will usually charge a percentage of the estate as a feat. It's not unlikely that he will charge the maximum allowed by the court but keep in mind that there's no reason you can't barter or look for a lawyer who will serve you for less. Another possibility is to name your bank as executor. The bank will more than likely outlive you and this way your estate would be handled by financial experts. The bank's fee is also based on a percentage of the estate. You can even name co-executors For example you can name a relative and your lawyer to be co-executors the important thing to remember is this. Never name anyone as executor without first getting his or her approval. In most states probate is closely supervised by the court as executor you could be required to seek court approval for just about every step you take to close out an estate and in some jurisdictions you may not even be allowed to petition the court without an attorney. Critics argue that in a case where the estate is simple as most of them are and the

executor is capable of such regulations waste not only time but also money in unnecessary fees for lawyers appraisers and the like. With that in mind a number of states are modifying their probate laws to simplify things and 11 states have moved even further to adopt much of what's called the Uniform probate code. What this does is to streamline state probate laws to make closing a relatively small estate quick simple and inexpensive without constant court supervision. What's more the code aligns the probate laws of all the states that adopt it. You're well advised to take a look at probate in your state and find out what the executors of your estate will have to contend with when the time comes. Early preparation can't hurt. With that in mind here's Bob's math. A I want to have the Olympic size swimming pool there right by the magnolia tree. The new one hand polished mahogany tennis courts are right here in the

modest six CA garage over here. Oh yes the house. It's a nice and that's just a guest house. You know this estate planning show can be fun. Good practice too. After all you never know when you're going to strike it rich. But there's also another type of est planning you might look into. The kind that takes care of your family after you're gone. That includes deciding who gets what your will and how much life insurance you need and how to leave your heirs your estate with out leaving them heavy death taxes. For some of those questions you may need professional advice especially when it comes to taxes. Well fortunately I too can be very professional. So allow me to introduce a method or two you might consider for reaching some of your financial goals. One thing you might consider is a trust fund. Here is how it works.

You are the trust maker. Take some of your money and put it in a trust. The fund can be run by a bank a lawyer or another responsible person who is named as trustee. He or she manages the fund for someone else's benefit someone. You name it that someone receives income on the principal in the trust. For example you set up a trust naming your daughter as beneficiary and your bank as trustee for the bank. Invest the money usually in stocks and bonds and your daughter receives the income on the principal. You can even set it up so that the principal can be invaded during a financial crisis. That means that under certain circumstances the trustee could withdraw some of the principal on your daughter's behalf and she'd still earn income from the remainder. You might even allow the trustee to dissolve the trust and give your daughter the entire principal if she should need it. The great thing about trust funds is that they're flexible.

You can set up a trust to go into effect while you're living or have one go into effect at your death. They can be set up for specific purposes like putting junior through college and you can make sure it isn't used for anything else. If you're leaving money to someone you think will fritter it away in no time by creating a trust you know the money won't disappear overnight. More and more people are looking into trust funds but they're still not for everyone. The average bank managed trust account in a small town by as just over $50000 and they're larger in metropolitan banks. You see the trust fund has to be large enough to pay the bank's maintenance fee. Some banks do have trust pools that are made up of smaller trust funds. Your bank can give you details. Of course a trust doesn't have to be managed by a bank. You can probably save a lot on management fees if you can get a close friend or relative to act as trustee. When you do set up a living trust you have to

file a federal gift tax return but that's usually a plus. You see giving money away is one way to reduce taxes. And that brings us to another idea although it's a little hard to take. It's giving money away. Straight out I mean you worked all those years for a buck and then you just give it away. But it may be worth your while to reduce the size of your estate before you expire. In some states you don't have to be all that rich to leave your heirs a heavily taxed estate. And if you really are well-off you also have federal estate taxes to contend with. In either case you can start giving away your estate to your heirs now. Then when you do go on to your award you'll find it comes in the form of tax savings federal taxes on your estate are usually reduced by the total amount you give away over the years. Your lawyer can fill you in on the

details. Of course if you give it away whether straight out or in a living trust you're around to see how much your heirs appreciate it. And how they use it who knows. With a little luck and some estate planning including trust funds and maybe even a giving program you might be able to leave your family on a state like this one in real life I mean. Trusts can also be used to reduce taxes on your estate thanks to last year's tax legislation relatively few estates are subject to the federal estate tax but state inheritance taxes are considerably less discriminating. Here's how you can use a trust to minimize either tax for future heirs. A trust you set up in your will to go into effect that your death will be considered part of your estate for tax purposes. But when your beneficiary dies the trust usually won't be considered part of his or her estate so when it passes on to the next heirs they will have the benefits of the tax savings. That's planning ahead. Of course the

primary purpose of any planning you do is to provide for your family after you're gone. Not just avoid taxes but often these two aims go hand in hand. Also as you're planning Don't shortchange yourself. Don't give away or put into trusts money that you may need later yourself. If you have small children you're naturally concerned about their financial protection if you should die while they're still young. But you have to be concerned about their care and upbringing too should both parents die before their time and that makes the selection of a guardian a critical decision a guardian should have child rearing expertise which means methods and values you approve of. The person you want to be guardian should be someone you know is willing and able to treat your children as their own. So make your choice carefully and give the Guardian a clear idea of the financial arrangements you have made for your children's care. By the way when it comes to choosing a guardian your children might make excellent consultants. Experts tell us it's a question children can understand and cope with.

Incidentally there's no reason why you must divide property an equal amount among your children in your will. If one child needs more for whatever reason and seems less able than his siblings to fend for himself you might arrange for the extra support he needs to avoid bitterness among your family. Your will should state the reason for your decision. I'm Robert Conrad. You know I live with danger constantly I mean I'm always jumping off buildings fighting bad guys being shot at stabbed at punched at ribbon overt center and sometimes I'm even in a war. And as we all know that's bad for your health. And that's how I've come to know how important it is to have a will. Not only that. But to be sure you know where it is. Now I am so used to being suddenly assaulted that I keep a copy of my will with me at all times because a will is no good if it can't be found so I keep it right I keep it right here. And it's important to know where it is especially if you live a life of danger now this must be the suit with the secret packet. I mean if

nobody can find a will. You might as well not have one. Maybe the tailor sewed it into the lining. They do that a lot for people who live lives of danger. I know I know it's it's got to be here. Even the best written updated will is worthless if it can't be found. That's why your spouse your lawyer or a trusted friend should know where your will is and have easy access to it. The safety deposit box isn't necessarily the best place for your will. And some states a safe deposit box is temporarily sealed when the owner dies. You may need a court order to open it to avoid complications keep a copy somewhere else. In fact you might even leave it with a Register of Wills at your local courthouse since that is where it will wind up anyway. Of course you want to be sure that they always have the most recent copy. Be sure to withdraw it should you decide to move away. Otherwise there could be considerable confusion when it's time to probate your estate.

Now another item that you may want to leave out of your safe deposit box is your life insurance policy. Your family will want to surrender it immediately so that payments can begin as soon as possible. A little advanced planning can spare your family a sometimes agonizing search for important papers. A letter of instruction is a convenient way of organizing vital information. You can include your wishes for funeral arrangements. The exact location of the key to your safe deposit box with a list of its contents and the whereabouts of other important papers like your life insurance policy in your will. It should also include a thorough and been Torii of your assets as well as your debts to make the difficult task of Probate a little easier. One woman who's been through it all recounts her experiences in her book widow and reify Kim recently talked with author Lynn Kane about coping with those problems. When your husband did the two of you ever talk about your finances or what your financial situation was going to be for you and your

children when he died I'm afraid by that time it was too late. He was a lawyer. They had no money at all how did that happen. Well in the first place Martin was a war that had been wounded to get 90 percent disability and he was told he was sure and in the second place like many women was a 20th century girl took care of the House and the boy to care for money by the time became aware of it. It was too late to do anything about insurance or investment or even to talk about it. Would you have done had you known I could have says Martin's pension because my money was my cookie jar money. I was totally unrealistic and foolish and irresponsible. In your book you suggest something called contingency. And. I'd like you to tell us a little bit about. How you think it should work.

Yes because I feel so strongly that men and women should talk about finances especially in days of fluctuating. I mean I recommend that a couple together with children sit down and do an annual review of the finances preferably with a lawyer with an insurance agent with an accountant. I think that getting professional help with this is they cost money initially but in the end it saves a lot of money. One partner is not interested in being you. Contingency can the other person doing anything about it. The only alternative to that would be a letter of instruction in which would contain where's a safe deposit box. What monies are available. What the insurance situation is certainly will a will should be in the safe deposit box with a lawyer. It should be in several places. Is there any suggestion that you might make for getting additional funds during the

period when the estate is being settled. Usually there are funds available in Social Security that brings in a station and insurance hopefully the kind of thing a friend can do incidentally is to leave an envelope unobtrusively on a dresser with cash. You could just say one more thing. One more suggestion. Well I think the most important thing is to get out of the crisis. I think we're all too afraid that it is going to happen we must recognize it as a contingency and it is going to happen to us all except you will should be kept up to date. You should review it at least once every three years and immediately upon the death of your executor or one of your heirs. And by the way to change your will you don't always have to rewrite the whole thing. Your lawyer can add a Qantas Sale or addition to your will that will do the job. However after two or three codicils your lawyer will probably redraft the

whole thing. Your will should also be reconsidered whenever your estate has a marked increase or decrease in value for more information on wills and estate planning. Here's friend Joe Hanson. As we mentioned earlier you can get legal services for Will making and estate planning at reduced rates. One way is through a Prepaid Legal Services Program. Your employer or union may pay for the services or the cost may be shared through a payroll deduction plan services and payment schedules vary from plan to plan. But counseling on wills and estates is commonly offered. If you already belong to a group plan don't hesitate to use the services you've already paid for them. If you don't belong find out if you qualify for a plan where you work. Also check any clubs or fraternal organizations you belong to. They often provide legal services to their members at reduced rates. For more information on group and Prepaid Legal Services. Write to resource center

for consumer use of legal services. 13 0 2 18th Street Northwest Washington D.C. 2 0 0 0 3 6. That's Resource Center 13 0 0 2 18th Street Northwest Washington D.C. 2 0 0 3 6. And don't forget our survival kit. This week's edition shows you how to pass your estate on to your loved ones with a minimum of confusion. The new federal tax laws should make a state plan easier than ever but our kit explains why you still need to play and carefully. It has the latest on using the new tax measures to your advantage. A related article includes an eight point strategy for estate planning and a look at the hazards of joint ownership. A letter of instruction will save your family weeks of searching for important records and documents a detail format in the kit outlines all the information you should include in your letter of instruction and other article explains trusts with emphasis on what you can reasonably expect to achieve with a

modest trust. The kit also covers how to choose an executor and what to do if you are named as the executor of someone else as a state. Most women survive their husbands but few are ready for the legal problems of widowhood. The kitten looks at one woman's experience. We also include a summary of this week's show and a bibliography of helpful books. For your copy send $1 to cover reproduction costs postage and handling to Will's box 1977 Owings Mills Maryland 2 1 1 1 7. Please allow 3 to 4 weeks for delivery. That's $1 to Will's box 977 always mails Maryland 2 1 1 1 7. You might also be interested in our publications on retirement planning social security and how to find a good lawyer. If so send $1 for each kit you'd like to consumer survival cat box 1977. Always Mills Maryland 2 1 1 1 7.

When it comes to your property there's nothing truer than the statement you can't take it with you. But there are right and wrong ways to leave it behind. The first and most important step is to find a lawyer preferably one who specializes in wills in the states and draw but will consider the use of trusts to provide for your family and to reduce taxes for your heirs. Maintain a letter of instruction outlining your assets and the location of all your important papers. And finally arrange your affairs so that your family will have enough income to tide them over doing probate. We'll see you next week on consumer survival kit. This program was produced by the Maryland Center for Public Broadcasting which is soley responsible for

its content. Major funding was provided by public television stations. Additional support was provided by unrestricted general program grants from the Corporation for Public Broadcasting and the Ford Foundation.