November/December/January 2005-2006


Feature Articles:


‘Do I Really Need a Will?’

Well, consider what happens if you die without one.

By DOUGLAS ANDERSON
Director of Philanthropy, Moose Charities




> I truly believe the only appropriate answer to the question posed in the headline above is: Absolutely. Every adult needs to have a valid will in place.

In fact, perhaps the headline should instead read: “Boy, I Really Need a Will!” Unfortunately, roughly half of all North American adults die without having prepared a valid Last Will and Testament. There are many reasons expressed for failing to prepare a will, but most of them are the result of common misperceptions about the need for this essential document. Following are a number of these misperceptions, and what we feel are legitimate answers.

“I’m too young to need a will!” Regardless of your age, really every adult should have a will. If you are leaving anything of value or any loved ones behind, your will makes a big difference for them. A will tells the court who is to be the legal guardian of your children. It also gives the court direction on the distribution of your assets.

“My estate is too small!” If you have any assets at all, even if they’re items with largely sentimental value, a will is the best way for you to ensure that they are distributed according to your wishes.

“Why should I worry? My assets will automatically go to my spouse and children, right?” This is a common myth that is simply not true. If you do not have a will, state or provincial law dictates what happens to your assets. While it is possible that your assets might end up in the same place you would have wanted them to go, there will almost certainly be less of those assets, as it will almost certainly cost more money to come to a resolution. Without a will, the process will also take longer--depleting the the amount of money available to your beneficiaries.

“Preparing a will costs a lot of money!” While the actual cost of preparing a will depends on the complexity of your estate, it is generally not a large amount. And, when you compare it to cost of NOT having a will--the depletion of your resources as the matter goes through the courts--and the anguish you can bring to your loved ones by not having one, the cost is not substantial at all!


.

Please click on any photograph below to view a larger image.




Moose Charities
Forward in the Good,
Onward in the Right
Common Misperceptions of What a Will Does--and Doesn’t--Do For You

Wills do help to distribute both funds and personal possessions according to your wishes. But they generally cannot control the distribution of other assets that have a named beneficiary. For example, even if your will were to expressly state that all assets are to be received by a specified person, an insurance policy that cites a different-named beneficiary would not be bound by the will.

Additionally, annuities, pension plans, IRAs, savings accounts, certificates of deposit, and trusts are all guided by their own beneficiary designations; they are not overridden by the terms of your will.

Your will does name an executor, who will administer your will after you are gone. You will want to select an able and trustworthy person to fill this position. Your will should also describe the powers and responsibilities of the executor. (Many people choose their spouse or a close friend, but you can also select an attorney to serve as your executor.)

If you have children, your will performs a very important task in the absence of a surviving parent. It enables you to indicate a guardian for your minor children. This is an essential point to cover in drafting a will--because if you do ot identify a guardian, the state may assume this responsibility--and officials may not identify the same person you would choose.

Give Your Will an Occasional Tune-up

As time marches on, it almost always brings change. Like you, your will is a living document, and it should be reviewed periodically to make sure it matches with your current wishes. The same holds true for reviewing those named beneficiaries on insurance policies, annuities, pensions and 401(k) plans, savings accounts, certificates of deposit and IRAs.

Perhaps the easiest way to change or amend a will is through the use of a codicil. A codicil is a simple attachment that can be executed to reflect the changes you wish to make --but without executing a new will. (For your reference, our Bequest Builder form contains an example of a simple codicil which may be printed from our website, www.moosecharities.org.

Leaving a Legacy . . .

It’s only natural to want to leave a legacy to one’s children, to loved ones and to the charitable causes they believe in. Many people view leaving their legacy as one of the most important activities of their lives--and yet they often put off planning it until the last moment. To help you get started with the important process of preparing a will, Moose Charities would be happy to offer one of our free informational brochures, How To Make a Will That Works, or Giving Through Your Will, to help you. We offer these as a service; there is no obligation.

You may also request our Bequest Builder form to guide you through the process of naming Mooseheart or Moosehaven in your estate plans. Simply contact me, Doug Anderson, at Moose Charities by calling 630/966-2200, or send an e-mail to DAnderson@moosecharities.org. You can also find our Bequest Builder form at www.moosecharities.org; just click on the “How to Give” link on the left, and select “Bequests.”

Disclaimer: The general information provided here, or by any representative of Moose Charities, is not presented as specific financial, legal or tax advice for any individual. Consultation with your own professional adviser(s) is always recommended.

Beneficiary Designations: a Simple Gift to Our Kids & Seniors

A gift to Mooseheart Child City & School, or to the Moosehaven retirement community--through your retirement plan, IRA, life insurance policy, savings account or certificate of deposit--can be a simple and meaningful way to help ensure a strong future for the children and seniors in our care. After your lifetime, these assets will transfer directly to the Moose charitable endeavor of your choice, without going through probate. Here are some common designation options:

Retirement plans and IRAs. Including Mooseheart or Moosehaven as a beneficiary enables you to avoid significant income taxes that would have been due if a retirement plan were left to heirs other than your spouse. These taxes can cost up to 70% of the retirement-plan assets, depending upon your particular situation. For this reason, retirement plans and IRAs make especially good charitable gifts.

Insurance policies. There are a number of ways you can name Mooseheart or Moosehaven as a beneficiary of an insurance policy, whether through your employer or through a separate policy that you hold. Such a gift may provide you with both current and future tax benefits.

Savings accounts and certificates of deposit. Designating Mooseheart or Moosehaven as a beneficiary of a savings account is simple--and allows full use of savings during your lifetime.
For more information, please contact Douglas Anderson, Director of Philanthropy, at 630/966-2200.

Do You Understand Joint Tenancy?

Too often, a well-meaning donor attempts to generously give something they thought they owned in entirety--but later found they did not. If you own property in joint tenancy, make sure you really understand what will happen if you die before the person(s) with whom you own something jointly. For example, many people with failing eyesight sign “friends” with better eyesight onto their checking accounts, as joint tenants with right of survivorship to help them with the bill-paying process. If you die first, these persons will legally control that account, even if it was your intent to have the funds pass to a beneficiary named in your will. There are safer ways to have friends help--discuss the options with your banker!

Holding real estate in joint tenancy has other potential pitfalls. Trying to pass such property to a child through joint tenancy may cause capital-gains taxes that could have been avoided. And if you hold property in joint tenancy with a grown son or daughter, it may be subject to any court judgments placed against them!

The moral? Ask questions of your lawyer, accountant and other professional advisers on all such matters!



[Back to top]