Where There’s a Will . . .
. . . there’s peace of mind. Anyone under 40 might not like to think about it, but organizing one’s personal affairs is always a good idea.
IT MIGHT SEEM INCONGRUOUS to discuss mortality in an issue dedicated to youthful excellence. (It might also seem crass. We prefer “incongruous.”) In fact, though, even the Incisal Edge 40 Under 40, now in the full flower of life (see page 36), will one day need to settle their affairs.
That day ought to be today — or soon. If you pass on without a legally sound will, your heirs will likely pay more taxes than necessary. Your children might not be cared for as you wish. And state law, not you, will determine where your assets go. Here’s how to avoid three common mistakes people make when drawing up a will.
1. NOT SIGNING IT CORRECTLY. State statutes vary, but often, if a will is not signed exactly the way the law dictates, it’s invalid. Some states require two wit- nesses, for example. Some mandate notarized signatures, and some require an “acknowledgement,” a formal written declaration that the signer truly intends this to be his or her will. That seems silly, but wills often have such “magic words” necessary to ensure legal validity. Professional assistance can help you make certain that your will is compliant. If you wait until you really need it, you’ll be in no position to rectify mistakes. (Our condolences to your survivors.)
Someday, like it or not, you’ll need to settle your affairs. That day should be today.
2. TITLING ASSETS INCORRECTLY. In other words, your stuff won’t go to the people you intend. Let’s say a woman wants her assets divided evenly between her two kids. To make paying bills easier, she adds one of them to her bank account as a joint owner. When she dies, all the money in the account belongs to the joint owner. Civil wars have started over less.
A simple remedy here would be to make one child an “authorized signatory”: able to access the bank account but not own it. Then, upon the mother’s death, the funds will pass equally to each child, as directed by the will.
Similarly, if your will creates a trust to be funded by your life insurance, be sure the trust is named as the policy beneficiary. If you don’t, the trust won’t be seeded, and its purpose (to reduce a tax payment, say) will be rendered moot.
3. FAILING TO UPDATE. Laws change. Families change. Assets change. (Do they ever.) A will is not a “one and done” item to be permanently checked off your to-do list. Update it periodically, especially after a major life event: marriage, divorce, birth of a child or grandchild.
Above all, seek help from a professional who is knowledgeable about your state’s laws. Making your way through the byzantine legal jungle to the sunny uplands of a well-crafted will can give you extraordinary peace of mind — whether your next birthday takes you to 40, 60, 80 or points beyond.