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Q. My husband and I realize we need wills, but what do we have to know up front before consulting an attorney? Or do we need an attorney at all? What about those online sites and software programs that let you do it yourself?
A. It's natural to put off writing a will. After all, it's not much fun to ponder your mortality and hash out who should raise the kids in the event your plane goes down on the way back from a weekend getaway. But remember, if you die without a will, a judge will decide what happens to both your children and your possessions.
Okay, guilt trip over. Here's what you need to know. Making a will serves three purposes: First, the main document specifies who gets your kids and your assets; second, a living will provides direction about your care if you're unable to make medical decisions yourself; and third, a trust, a legal entity akin to a company, holds your assets upon your death and disperses them to your children. Since minors can't receive the money, the trust keeps it until they come of age -- and then doles it out following a schedule you choose, so they don't simply get a lump sum on turning 18. A trust can also ensure that your children will inherit your assets should your surviving spouse remarry or have additional children.
All of this gets complicated, which is why I recommend using a wills and estates attorney instead of an online service or software package. While a computer-generated will is better than none, you're better off with an expert advising you than with a series of drop-down menu choices. Also, an attorney is trained to look beyond the will itself. For example, no matter what the will says, your retirement accounts and insurance payouts will go to the beneficiaries you designated when you filled out the forms, which could have been decades ago. An attorney helps you fix such discrepancies; computer-based systems do not.
For two wills (one for each of you), you'll pay an attorney roughly $500 to $1,200, compared with less than $100 apiece for an online service. Attorneys charge by the hour, so being prepared reduces the cost. Complete the worksheet the attorney sends before your appointment and bring current statements from all of your asset and liability accounts, plus a ballpark estimate of your house's value. Then comes the tricky part. You'll need to decide who will take on three important duties in the event of your deaths:
Guardian. If you have minor children (or a special-needs dependent who requires custodial care as an adult), your will must specify a guardian. This decision can create marital stress -- you can't imagine his sister as your children's mother any more than he can imagine yours in the same role -- but realize that no option is perfect and pick from those you have. Focus on objective factors: finances, parenting style, age, religion and geographic proximity to the surroundings your kids are familiar with.
Executor. This person is in charge of reading your will and carrying out its instructions. The job typically includes selling your house and divvying up other tangible belongings, from vehicles to family heirlooms. The executor is usually an adult family member, such as a sibling or grown child.
Trustee. This person, who controls the trust you've left for your children, is often the same as the executor. While the kids are minors, the job involves investing the assets and managing those investments. Later, the trustee disperses the funds according to the timeline you've outlined in the trust's documents, such as when college tuition needs to be paid or other major expenses come due.
For all three of these jobs, you'll need both a primary and a secondary choice, in case the first is unable to carry out the assignment. Be sure to talk to the people you select to make sure they're comfortable with the responsibility.
I know that writing a will is not a pleasant task, but it's great that you're taking care of it now. Think of the relief you'll feel once you've got everything sorted out for your heirs.
Karen Lee is a certified financial planner and money coach in Atlanta. She's the mother of two teenagers, author of It's Just Money, So Why Does It Cause So Many Problems? and a frequent guest contributor on CNN.
Originally published in Ladies' Home Journal, April 2012.