(Source: CNBC): Deborah Nason – Does everyone need a will? And if so, when is the time to get one? “Many people think that they don’t need a will … since they don’t have an ‘estate,'” said certified financial planner Scott A. Bishop, partner with STA Wealth Management. “That is just wrong.”A will is not for you, but it is for those you love and leave behind,” he said. “When you die, someone has to settle your estate if you own anything.”
Even for a small checking account and a car, he said, someone has to distribute the account and change title to the car. Furthermore, minus a will, someone will have to go to probate court, prove a relationship to the deceased and be assigned by a judge to serve as executor.
According to Leon LaBrecque, a CFP and managing partner and CEO of LJPR Financial Advisors, wills are essential because they direct property not covered by other means, such as beneficiary designations, trusts or properly constructed deeds.
“If you get hit by the proverbial bus, we need to take the legal proceeds and process it, and a will is almost always an essential part of that transfer,” he said. “[One] should note that wills do not avoid probate but are probate instructions.” Furthermore, LaBrecque stressed that everyone should have a financial and health-care durable power of attorney.
Life cycle needs
“An estate plan should be a fluid document as you progress through the different stages of life,” said Brett Anderson, CFP, president of St. Croix Advisors. Evolving considerations range from children with special needs to legacy planning to leaving one’s spouse or kids with financial choices down the road.
Below are examples of the different roles wills can play throughout the life cycle.
Attaining majority. People mistakenly assume that young, single people don’t need a will or other estate-planning documents, said CFP Wade H. Chessman, president of Chessman Wealth Strategies.
“My daughter just turned 18, and one of the first things we did is complete a will and other documents,” he said. “This is probably more important if she were to have a medical event and we needed to make medical decisions on her behalf.
“Now that she is no longer a minor, we have no legal authority in that matter. … It gives me some peace of mind, because she’s five hours away.”
“There is a misconception that if you completed a will once, you don’t need to worry about any estate-planning considerations if your wishes haven’t changed,” said Theodore R. Haley, CFP, president of Advanced Wealth Management.
In fact, documents should be revisited periodically because laws change and people forget what they had written down years ago, he said. In addition, wills don’t have any power over beneficiary designations on other items, such as life insurance and retirement accounts.
“Not reviewing your beneficiaries periodically can lead to your money ending up in the wrong hands,” Haley said.
Another misconception, said Anderson of St. Croix Advisors, is that if you died without a written will, you don’t have one.
“Our government created laws on who will receive your ‘stuff’ and money, so the question is, do you want the government to decide?”
“It turns out every one of us has a will,” he said. “All the states have something called intestate succession.
“Our government created laws on who will receive your ‘stuff’ and money, so the question is, do you want the government to decide who gets [it]?” Anderson added. “Maybe a written will is a good idea, after all.”
Attorney/financial advisor LaBrecque provides a big-picture perspective: “There are three circumstances of existence: You’re OK, you’re not OK, or you’re dead,” he said. “When you’re OK, we can talk about IRAs and investing and complain about the news.
“When you’re not OK, you need financial and health-care powers of attorney,” LaBrecque added. “When you’re dead — [and] I unfortunately assure you that no one gets out of this world alive — then you need a will.”