What's the Status of Your Legal Will?

In a world where we plan meticulously for vacations, home renovations, and retirement, it's surprising how many of us avoid planning for the inevitable. According to recent studies, nearly 70% of Americans don't have an updated will. If you've pulled this card from your deck, it's time to face this critical question head-on: What's the status of your legal will?

Why Having a Will Isn't Optional

A will isn't just a legal document, it's your voice when you can no longer speak for yourself. Without one, state laws (called intestacy laws) determine what happens to everything you've worked for, potentially leaving your loved ones with unnecessary financial burdens, family conflicts, and emotional stress during an already difficult time.

Wills vs. Trusts: Understanding the Difference

Last Will and Testament

A will is a legal document that:

• Names who receives your assets after death

• Designates guardians for minor children

• Names an executor to handle your estate

• Only takes effect after death

• Must go through probate court

Living Trust

A trust is a legal arrangement that:

• Holds and manages assets during your lifetime

• Automatically transfers assets to beneficiaries after death

• Avoids probate court

• Can provide incapacity planning

• Often offers more privacy than a will

Many people ask: "Do I need both?" The answer depends on your specific situation, but many financial advisors recommend having a simple will even if you have a comprehensive trust.

The Probate Process: A Major Misconception

Important Misconception: "Having a will means my estate will avoid probate."

This is perhaps one of the most common and costly misconceptions about wills. The truth is that a will does not avoid probate; a will must go through probate to be executed. Probate is the legal process through which a will is validated and executed under court supervision.

What Exactly Is Probate?

Probate is a court-supervised process that:

• Validates your will

• Identifies and inventories your property

• Has your property been appraised

• Pays your debts and taxes

• Distribute your remaining property according to your will

The Downsides of Probate

• Public process: Court records are available for anyone to view

• Time-consuming: Typically takes 6-12 months, but can take years in complex cases

• Expensive: Legal fees, court costs, and executor fees can consume 3-7% of your estate's value

• State-specific: If you own property in multiple states, your estate may face multiple probate proceedings

• Family stress: The process can be emotionally draining for grieving family members

Assets That Must Go Through Probate

• Property solely in your name

• Your share of property owned as "tenants in common"

• Assets without named beneficiaries

Assets That Typically Avoid Probate

• Property transferred to a living trust before death

• Life insurance proceeds with named beneficiaries

• Retirement accounts (IRAs, 401(k)s) with named beneficiaries

• Property owned jointly with right of survivorship

• Assets with transfer-on-death (TOD) or payable-on-death (POD) designations

• In some states, real property transferred by a transfer-on-death deed

Strategies to Minimize or Avoid Probate

1. Revocable living trust: Transfer assets to a trust during your lifetime

2. Joint ownership: Hold property with rights of survivorship

3. Beneficiary designations: Ensure all policies, accounts have current beneficiaries

4. TOD/POD accounts: Designate beneficiaries for bank and investment accounts

5. Small estate procedures: Many states offer simplified processes for estates under certain value thresholds

What Happens Without a Will?

If you die "intestate" (without a will):

• State laws determine who gets your assets

• The court appoints an administrator (who may be a stranger)

• Your heirs may face a lengthy, expensive probate process

• Your minor children's guardianship is decided by the courts

• Family heirlooms may not go to your intended recipients

• Your charitable intentions go unfulfilled

State Differences That Matter

Estate laws vary significantly between states. For example:

• Community property states (like California) treat marital assets differently than common law states

• Some states have estate or inheritance taxes, while others don't

• Probate procedures and costs vary dramatically

• Requirements for will validity differ (number of witnesses, notarization)

• Small estate thresholds range from $10,000 to $275,000, depending on the state

Living in multiple states or owning property across state lines? You'll need to consider how interstate property laws affect your estate plan.

What Goes Into a Will?

A comprehensive will typically includes:

• An executor designation

• Beneficiary designations

• Guardian appointments for minor children

• Specific bequests (particular items for specific people)

• Residuary clause (what happens to everything else)

• Instructions for pet care

• Funeral and burial wishes (though better placed in a separate document)

Beyond the Basic Will: The Complete Estate Plan

A will is just one component of a comprehensive estate plan. Consider:

• Advanced healthcare directives

• Financial power of attorney

• Living will

• Letter of instruction (informal document with personal wishes)

• Digital asset instructions

DIY vs. Professional Help: Weighing Your Options

DIY Online Services

Several reputable online services offer will-creation tools:

• LegalZoom (starting at $89)

• Nolo's Quicken WillMaker ($99)

• Rocket Lawyer (subscription-based)

• FreeWill (free for basic wills)

When to Consider an Attorney

While DIY options work for simple situations, consider professional help if you:

• Have substantial assets

• Own a business

• Have a blended family

• Want to disinherit someone

• Have a disabled dependent

• Own property in multiple states

• Have complicated family dynamics

• Want to minimize probate costs

• Need tax planning strategies

Attorney fees typically range from $300-$1,000 for basic wills to $1,000-$3,000 for more complex estate plans.

When a Will Is Not Enough: Trust Considerations

For many Gen Xers and Baby Boomers, a will alone may not be sufficient. Consider a trust if you:

• Want to avoid probate

• Seek privacy for your estate matters

• Have beneficiaries who need asset management

• Want to control distributions over time rather than all at once

• Have a beneficiary with special needs

• Want to minimize estate taxes

• Own real estate in multiple states

• Wish to protect assets from creditors

• Want to provide for charitable giving

Special Considerations for Our Generation

As Gen Xers and Baby Boomers, we have unique considerations:

• Digital assets (social media accounts, online photos, cryptocurrency)

• Supporting adult children while caring for aging parents

• Blended families from multiple marriages

• Charitable legacy planning

• Business succession planning

• Planning for pets

• Long-term care planning

Taking Action: Next Steps

1. Download our checklist and complete your asset inventory

2. Review the sample to understand what you need

3. Decide whether DIY or professional help is right for you

4. Consider whether a will alone is sufficient or if you need trusts

5. Set a deadline on your calendar to complete your will

6. Talk to your loved ones about your plans

Resources to Help You Get Started

State-Specific Information

• AARP's State-by-State Will Information: www.aarp.org/retirement/planning-for-retirement/

• USA.gov's Estate Planning: www.usa.gov/estate

• Nolo's State Law Resources: www.nolo.com/legal-encyclopedia/state-laws-estates-probate

Free and Low-Cost Legal Help

• Legal Aid offices in your area

• Pro bono services through your State Bar Association

• Senior citizen legal clinics

• Veterans’ benefits for will preparation

Books and Guides

• "Plan Your Estate" by Denis Clifford

• "Estate Planning For Dummies" by N. Brian Caverly

• "The Wall Street Journal Complete Estate Planning Guidebook" by Rachel Emma Silverman

Final Thoughts

Remember, a will isn't just about your assets—it's about your legacy. It's about making things easier for those you love during what will be one of the hardest times of their lives. It's about ensuring your wishes are respected and your values live on.

And while a will is essential, understanding its limitations, particularly regarding probate, can help you create a more comprehensive plan that truly protects your loved ones and your legacy.

So we ask again: What's the status of your legal will?

Next week's Pardon the Question newsletter will address: "Have you documented your funeral and burial wishes?"

Disclaimer: This article provides general information for educational purposes only and is not a substitute for professional advice. Laws vary by state, and individual situations differ. Consult with a qualified attorney for advice specific to your circumstances.