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Money talk.

The famous line of the late Jack Benny, "If I can't take it with me I'm not going," was always good for a big laugh. Not so funny, however, is that three out of four Americans die intestate (without a will). And if you think that your assets don't total enough to make a will necessary, you may be wrong. Even though your family is in the lower-middle income bracket, when you figure the value of your home, your life insurance, perhaps a small business or a farm and other assets, your estate could easily amount to six figures.

What happens to this estate if you haven't taken the time or spent the $50 to $100 to have a simple will drawn up? Depending upon the laws of your state, what happens may not be at all what you had in mind. (Complicated wills, of course, will cost more and should be handled by an attorney who specializes in estate planning.)

Some states divide an inheritance equally between the spouse and children, for example. Other states may ignore needy relatives and turn over your money to those already well off. Even those you might least want to have it could come in for a substantial share.

Holding your property--house, stocks, bonds, bank account, etc.--in joint ownership is not a substitute for a will. Joint ownership with right of survivorship may serve to avoid probate, but there are certain to be assets not jointly owned. What happens to them? and what happens if both joint owners die simultaneously? The law then distributes the property in a manner the co-owners might not have wanted. How much property should be held in joint ownership is better left to the advice of someone skilled in estate planning.

Before seeing a lawyer about drawing up a will, you should make a list of your assets and liabilities. Begin with the checking and savings accounts (although a joint bank account and, in some states, real estate owned jointly or by tenancy by the entireties are two major items that pass outside a will); certificates of deposit; stocks and bonds; money market and mutual funds; the face value of group and personal life-insurance policies; IRA and Keogh plans; interests in thrift accounts at work.

Then list the current value of your personal belongings: jewelry, clothing, furniture, car, etc. Now deduct your liabilities, including mortgages and other loans, and you'll have the net value of your estate to take to your lawyer.

If that net value in 1984 is less than $325,000 (next year--$400,000; in 1986--$500,000; or $600,000 in 1987 and beyond), you can forget about paying federal estate taxes. In fact, regardless of the amount of your estate, you can now leave an unlimited sum of money to your spouse without the feds taking a dime of it in estate taxes.

Yes, there is a way to bypass the cost of a store-bought will--buying a form and preparing your own. But it isn't recommended. Whatever you may have read about wills being legally drawn up on an old flour sack or the blade of a scoop shovel, too many trivial formalities are lurking in legalese that will invalidate such an instrument, namely: typewritten, printed or stamped material appearing on a handwritten will or a missing, replaced or out-of-place page. A change made before or after signing the will may void the item changed if not the entire will; for example, you cannot dispose of property simply by adding a provision after your signature. The addition will have no effect. And you cannot void a will by writing a sentence such as "This will is void" and your signature at the end. A will must be canceled with the same formality with which it was drawn up. Although you may sneer at these seemingly unnecessary formalities, they can be extremely important.

Now about the executor, or personal representative. If your estate is relatively simple, you may prefer a trusted friend or a younger member of the family who has shown good judgment and is reasonably competent in handling ordinary business transactions. This person will see to it that your assets are collected and inventoried, your debts paid and your assets distributed according to your wishes. If you feel that your estate necessitates the experience of a lawyer, or a bank or a trust company (which often must be bonded), a substantial fee, plus the bonding premium, will be paid with funds from the estate. Before choosing a friend or relative, who will likely waive this fee, you first must get his approval.

One final note. Neither your safe-deposit box nor one held jointly is recommended for storing a will. If the box is sealed upon death, some states require your executor to get a court order to open it and to get the will. No such problem exists when the will lies in the safe of your attorney or executor (provided your executor is a bank or trust company). Keeping a copy of your will in a safe place at home, known to your main beneficiaries, is a good idea.

(Besides a will allocating your estate, you might also consider a "living will," which instructs doctors and survivors about the extent of medical treatment you wish if your become terminally ill, and consider a letter of instruction, expressing your funeral preferences and containing a complete list of your assets.)

Dying's complicated business. You can make it simpler with a will.
COPYRIGHT 1984 Saturday Evening Post Society
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Copyright 1984 Gale, Cengage Learning. All rights reserved.

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Title Annotation:estate planning
Author:Allen, Michael
Publication:Saturday Evening Post
Article Type:column
Date:Oct 1, 1984
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