Dollars and Sense:
Wills

In the work that I do with clients, I focus on helping them organize and plan their financial lives. There are several issues that are closely related, but not directly linked, to helping people plan their finances. One very important area that is closely related to the work that I do is the area of a client’s legal documents. The best laid financial plan may well come undone if a client’s legal documents are not in order.

Over the next few months, I would like to present some information focused on the important legal documents that most people should have in place. This month I will present some information on wills. We will then review Powers of Attorney. Information on trusts and their uses will then be covered.

What is a will?
A will may be the most vital piece of your estate plan, even if your estate is a modest one. It is a legal document that lets you direct how your property will be dispersed (among other things) when you die. It becomes effective only after your death. It also allows you to nominate an estate executor as the legal representative who carries out your wishes. Two important issues to understand about a will is that-

1. It allows you to direct where your assets go at you death, and avoids the laws of your state from directing how your assets are distributed (which may or may not be consistent with your wishes).

2. It directs the distribution of only “probate” assets, which are generally assets owned only in your name that do not have a named beneficiary listed

In addition, in many states, your will is the only legal way you can name a guardian for your minor children. Surely, they are the most important “asset” that the Lord has entrusted to us!

Without a will, your property will be distributed according to the intestacy laws of your state. The laws of your state also govern the validity of a will.

What are the requirements?
Requirements vary from state to state. Generally, for your will to be valid, the following requirements must be satisfied.

You must be 18 and of sound mind
Generally, you must be 18 years of age to execute a will, although some states have a different minimum age requirement.

You also must be of sound mind. That means that you must have testamentary capacity--that you know and understand what property you own, its nature, who would inherit it, and the plan for disposition outlined in the will.

You must also be free of undue influence or fraud at the time the will is drafted. In other words, you must draw up a will of your own free will.

A Will must be properly executed
Your will must be properly executed. Generally, this means that the will must be:

• Written--The general rule is that a will must be written. Usually, the will is typewritten or in some printed form. The one exception to the general rule is a nuncupative (oral) will. Nuncupative wills are generally valid only if made during your last illness and only if the witnesses reduce it to writing very soon afterward.

• Signed by you (the testator)--You or someone in your presence and at your direction must sign the will.

• Witnessed--Generally, your signature must be witnessed by two competent persons. Some states require three witnesses and some require no witnesses in certain cases, such as when a holographic will is executed. A holographic will is a will that is valid despite not being witnessed because it is completely in the testator’s handwriting. Other states may also require that the signatures be notarized.

Technical Note: Competency is a legal term. It means that the witnesses are of legal age (generally 18) and understand what they are witnessing. A witness is generally not considered competent if he or she is a beneficiary under the will and would not inherit if you died intestate. If this happens, the state will generally void the devise or legacy to that beneficiary. Some states void bequests to all witnesses.

For additional information concerning any of the above listed topics, or for a full report from Forefield Financial that was used to prepare this material, e-mail me at Neal@CovenantFinancialAdvisors.net or write to me at- Dollars and Sense, C/O The Outreacher, P. O. Box 1115, New Philadelphia, OH 44663.

If you have questions in the area of finances and investing, feel free to forward them to me at the above addresses as well.

Advisory services are provided through Creative Financial Designs, Inc., Registered Investment Adviser, and securities are offered through CFD Investments, Inc., a registered Broker/Dealer. Member FINRA & SIPC, 2704 South Goyer Road, Kokomo, IN 46902 (765) 453-9600 The CFD companies do not offer legal or tax advice