Does Everyone Need A Will?
By Dr. Jesse Brown
Pathway to your Dream
Each week we will be doing financial makeovers answering your question one by one . If you have a question then all you have to do is email us and we will do a free financial make over and send it to you. For a select few we will print your answers in this column each week . There’s no magic potions, no get quick rich schemes. Just time honored methods that will guarantee financial success. All that is required of those with the desire, is discipline. You must set up a plan and stick with it. In the end, your financial success depends on you.
Here is this weeks question:
I have a mortgage on my house, a monthly payment for my car and my insurance policies have beneficiaries named. Do I still need a will?
George Jones
Cedar Rapids, Iowa Answer:
Many people believe, for various reasons, that they do not need a will. But how valid are the more common reasons for not preparing a will?
Your estate is too small. Some believe that if their estate won't be subject to estate taxes (in 2006, your taxable estate must be over $675,000 before estate taxes would be owed), there is no need for a will. However, a will's purpose is not to save estate taxes, but to:
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Provide for the distribution of your assets. Without a will or other estate planning documents, your estate will be distributed in accordance with state law, which may or may not coincide with your desires.
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Name guardians for your minor children. Without a will, the courts decide who will raise children when both parents die.
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Select an executor for your estate. The executor assembles and values your assets; files income, estate, and inheritance tax returns; distributes assets; and accounts for all transactions. You will typically be in a better position than the courts, based on family relationships and individual qualifications, to decide who should be named executor of your estate.
All your property is jointly owned. When one owner dies, jointly-owned property passes directly to the joint owner, regardless of provisions in a will. Also, the unlimited marital deduction allows you to leave any amount of your estate to your spouse without paying estate taxes. Thus, many married couples use joint property ownership as their sole estate planning technique. However, if your joint taxable estate exceeds the lifetime gift and estate tax exclusion ($675,000 in 2006), your estate may save estate taxes by distributing some assets to other heirs.
A living trust will distribute your assets. Only assets that have actually been conveyed to the living trust are controlled by the trust document. Typically, a pour over will is also needed, which places in the trust any assets not held by the trust at your death.
You expect your estate to grow significantly in the future. Some feel it is premature to plan their estate while it is being built. However, a will can be changed. In fact, you should periodically review your entire estate plan to see if changes in your personal situation, preferences, or tax laws require changes to your plan. For one on one Pay Yourself First Personal Coaching to help you maximize your time, energize your efforts and achieve the financial well being and investment success that you’ve dreamed about. Log on to: www.pyfcoaching.com call 800-492-3080, ext 100.
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ABOUT THE AUTHOR
Jesse Brown was a featured public speaker and author and writes a monthly newsletter called "Pay Yourself First". The newsletter is free by logging on to www.jessebrownonline.com . From Chicago , IL., Brown , oversees millions of dollars in mutual funds , stocks and bonds for his investor clients. Jesse B. Brown is the author of the book “Investing in the Dream – Wealth Building Strategies for American Seeking Financial Freedom “, “ Pay Yourself First” and “101 Real Money Questions” all in your local book stores . Mr. Brown can be reached at 1-800- 955-0418.
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