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leave behind. In fact, despite all the talk about the burgeoning num- ber of millionaires in this country, 93 percent of Americans have estates that add up to less than $1 million. A fourth of those who make wills doubt that they will have anything of real value to leave. But they should definitely still make one. Wills are about more than what happens to your money and possessions. They’re about whom you (the testator if you are a man or testatrix if you are a woman) want to finish raising your minor children and who will be in charge of making sure your wishes are carried out (an executor or executrix).
Parents often dawdle here because they think that no one will be the perfect guardian. But a pretty good one whom you select is still a whole lot better than leaving your child’s destiny in the hands of the state.
Wills can be changed as often as your life circumstances or desires do. But be sure that your latest document notes the date and pro- claims that this is your last will and testament, prepared by you while you were of sound mind and body and supersedes all prior wills you have made.
Ideally, your will should:
° Name a guardian for your children and for their money and pos- sessions.
° Name an executor to make sure your wishes as stated in the will are carried out.
° Stipulate where the money to pay taxes, debts, and your funeral should come from.
° Be signed by two witnesses who are not beneficiaries in the will.
(By signing the will, they could lose what you wanted them to inherit.)
° Not contain dollar amounts but percentages instead
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° Not contain special burial instructions such as a desire to be cre- mated
You do not need to get overly specific about distribution of per- sonal effects. First of all, you can distribute cash or possessions worth up to $11,000 per year ($22,000 per couple) without incurring a gift tax. This will lessen the taxable value of your estate. Second, you may want to leave a few items to specific relatives and friends in a separate letter to your executor. It’s not necessary to include it in the will. Third, Bankrate recommends that your personal effects be appraised upon your death, and a list of items be prepared with the indications of value. Then surviving relatives participate in a “round robin.” In this process, each beneficiary you want included in the process takes turns choosing what items they want, with the oldest child going first (for example), or drawing straws to establish the order of participation. At the end of the process, the remaining items are sold or donated, the value of each beneficiary’s choices is estab- lished, and then cash distributions are made to even things out.
To prepare a will you can hire an attorney you trust or you can do it yourself with the help of will-writing programs or books. An excellent program is Nolo Press’s “Willmaker Plus,” available at www.nolo.com. An attorney will usually do a bare-bones or simple will (meaning no trusts and an estate value under $1 million) for less than $100.
If you have at least $250,000 to leave, you might want to set up a living trust, an agreement between you, the grantorwho establishes and funds the trust, and the trustee, who administers it. When some- one with a living trust dies, he or she can leave all his assets to the trust, which can then be doled out by the trustee. This escapes the attorney’s fees (usually about two to three percent of the estate) for
presenting the will to the court. Living trusts also get the assets into the heirs’ hands more quickly (60 to 90 days rather than nine months or so for probate). An attorney will set up a living trust for $500 to
$1,000, and there is a yearly maintenance fee charged by the institu- tion that houses it.
Living Wills
Most individuals have their living wills and durable powers of attor- ney prepared at the same time they prepare their last will and testa- ment. But don’t wait too long. Anything can happen at any time and you want to be in control of your health care decisions even if you become incapacitated. A living will makes your health care wishes known ahead of time. Appointing a durable power of attorney for health care assures that they’ll be followed.
A living will is a legal document in which you direct your physician to withdraw life support if you become terminally ill, or find yourself in an irreversible coma or vegetative state and are no longer capable of making your own decisions. Your living will should address what your physician is to do about resuscitation, life support, a ventilator, antibiotics, a feeding tube, intravenous artificial hydration, pain med- ication and oxygen therapy, and “do not resuscitate” orders. You can make your living will very specific.
Although a living will directs your doctor how to handle the situa- tion when you are terminal, it’s a good idea to have a durable power of attorney for health care, an agent or proxy you appoint to make medical decisions based on your previously stated wishes, and a backup should the appointed person choose not to make what could be a very difficult decision. The health care agent appointed through a durable power of attorney can make other types of health care and
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treatment decisions for you if you are not competent to do so your- self. Be sure to give your physician and health care agent copies of the documents. You can change the terms of your living will and durable power of attorney for health care at any time.
Funerals
A funeral service is right up there with buying a car for expense (but, we’d wager, not enjoyment). During what is usually a highly emo- tional time, shoppers are often pressured or guilt-tripped into buying pricey funeral goods or services that they do not need or want.
According to the American Association of Retired Persons, funeral and burial costs can easily reach $10,000. The average cost of a tra- ditional adult funeral in 1999 was $5,020 without any extras. Burial costs can add an extra $2,000 or more. Flowers, obituary notices, bur- ial liners or vaults, limousines, and acknowledgement cards—can all add up to a major expenditure.
To prevent yourself from being pressured into buying funeral para- phernalia that you do not want (and then end up having to spend years paying it off), you should shop around. Prices vary tremendously.
Experts recommend getting quotes from at least three sources, yet just 54 percent of Americans expect to bury loved ones with any ben- efit of comparison shopping.
The law requires funeral homes to give you a written price list for goods and services. Ask for it to help keep your emotional trigger under control. Prices should include the initial conference, consulta- tions, paperwork and overhead, or a “nondeclinable fee” added to the total cost of the funeral. There is wide variation in pricing the non- declinable fee. The general price list should also include cost of trans- portation of the body, care of the body (including embalming), and
use of the funeral home for the viewing, the wake, visitation, and the funeral or memorial ceremony. Alternative arrangements such as cre- mation and optional services such as flowers, placing an obituary, and obtaining a death certificate should also be listed on the general price list. Embalming is rarely required when the person is to be buried within 24 to 48 hours, although some unscrupulous morticians push it and pretend that it is required. Refrigeration is a less costly option.
If a funeral director refuses to allow a public viewing without embalm- ing, you can ask for a private viewing without embalming. The process is very invasive for a temporary cosmetic effect.
Sealed caskets cost hundreds of dollars more than unsealed cas- kets, but do not protect or preserve the body any better than unsealed.
The casket is the single costliest item in a traditional funeral—with an average price approaching $2,000. While caskets were once sold only by funeral homes, today you can buy one on the Internet or use a family-built one if you choose. A funeral home cannot charge a han- dling fee if you wish to bring in your own casket from an outside source (they’re often available for much less). Know that you do not have to buy a package of services the funeral home is pushing: You can and should choose à la carte. You can also have a memorial ser- vice at home, your church, a park, or the community center for much less money than at a funeral home. You can cut costs by limiting the viewing to a day or an hour before the funeral and by dressing your loved one in a favorite outfit instead of costly burial clothing.
The Funeral Consumers Alliance has 115 chapters in 46 states around the country. Staffed by volunteers, they have information on local funeral homes as well as price surveys that can help you com- parison shop for services. Some have even negotiated discounts with local funeral homes.