Estate planning basics

(MS) - Estate planning is a broad term that encompasses the distribution of your assets to people you choose after you are deceased. It generally involves the drafting of a will, and where necessary, the creation of real estate trusts. It can also include funeral preparation information, the name of your designated executor, and plans for organ donation, child care, and guardianship.

It is important to have a plan in place, whether simple or all-encompassing, regardless of your age, marital status, financial status, or health situation. However, if you live an unusually risky lifestyle, or are very wealthy, it’s wise to set up an estate plan immediately to protect your assets.

One of the main advantages of a will is that it avoids the probate process, which occurs when there isn’t a will in place, and requires the court to split up your possessions. This could result in your property going to people you might not want it to go to. For example, the majority of your assets could be left to your children, with your spouse left financially floundering. Then he or she would need to seek the court’s permission to spend the money - a timely and costly process. A will helps head off concerns with probate.

Common will questions

Though most people are aware that they need a will, the majority - about 70 percent of Americans - doesn’t have one, according to Nolo.com, a legal information website. The reasons for procrastination vary. But, once the will is done, you can rest a little easier knowing that your wishes will be followed after your death.

Because it is such an important document, here is some information you should know:

Q: Do I need a lawyer to draft a will?

A: In most cases, no. Making a will rarely involves complicated legal rules, and most people can draft their own will with the aid of a good self-help book or software program. However, if you stumble across roadblocks or questions, seek the advice of a lawyer.

Q: Can I make a handwritten will since I don’t have much property?

A: These types of wills, called holographic wills, are valid in very few states. And if need be, they may not hold up well if there is a need for probate court. Be safe and avoid them.

Q: What makes a will legal?

A: If you are of sound mind, then there are only a few other requirements. 1. The document must expressly state that it’s your will. 2. You must date and sign the will. 3. The will must be signed by at least two witnesses. They must watch you sign the will, although they don’t need to read it. Your witnesses, in most states, must be people who won’t inherit anything under the will. Generally, you don’t need the will notarized. If you have questions about the requirements, contact an attorney.

Q: What if I don’t want to leave assets to my spouse?

A: Your spouse is legally protected against walking away with nothing from your will. In some states (Nevada, Arizona, California, for example), he or she inherits half of your estate, regardless of what your will indicates. In most other states, your spouse is entitled to a portion of your estate.

Q: What if I have young children?

A: You can leave assets to young children, but they will need to be managed by an adult until they reach 18 years of age. If this is your plan, also name an adult financial guardian in the will.