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Authors: Suze Orman
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about $30 to $60. If you use any of these methods, you’ll also need to sign your will and, while you are signing it, to have two or three people witness your signature and sign the will as well. Some states require two signatures, some three, so to be on the safe side, ask three people to witness your signature. When you want to change anything in the will, you simply draw up what is called a
codicil
, which is an additional paper enumerating your changes. Follow the same procedure as when you signed the will in the first place.
If you want, you can draw up a will yourself on a piece of paper, which will cost you nothing. This is known as a
holographic will
. Just make sure that the paper you use has no other writing on it or the will will not be considered legal. Make sure, too, that the entire will is written in your handwriting and is dated and signed by you. If you make a mistake, don’t cross it out. Start over. Anything crossed out is considered an interlineation, making the will null and void. Do not have anyone else witness a holographic will because, again, this will make it null and void. If you want to change a holographic will, it is better just to redo the entire thing.
Your will should specify an
executor
. This is the person who will make sure that all the legal, financial, and emotional matters are taken care of after you have died and that the wishes expressed in your will are carried out. Executors deal with the legal system and the accountant and all the beneficiaries. They contact the banks and insurance companies and inform them of your passing and send in the necessary documentation to change the names on all the accounts to the new owners. For tax purposes, all the property will have to be valued and the final tax returns compiled; and if any money is owed to the IRS, the executor must make sure that it has been paid or set aside before any assets are distributed to the beneficiaries of the will. In many states the executor gets a set fee for having done all these tasks, or, depending on where you live, you may just decide to specify a fee in the will.
So preparing a will is relatively simple. Where it can get complicated, as you saw with Nancy, is in its execution after you have died. All your will says is where you want your property to go. It does not necessarily get it there very easily.
After your death your will has to pass through the court system. Usually the executor has a lawyer handle this. Once the will gets to the court, two things happen. First, a judge has to authenticate the will, to make sure it is valid. After the judge probates the will, he or she will then sign a court order transferring title to the property covered in the will to the people who are intended to receive it, as reflected in the will. In Jeff’s case, for example, title to Nancy’s house would be transferred to his name once probate was completed.
This sounds easy enough, but can be a nightmare.
In the first place, the process can take anywhere from six months to two years or more, while ownership of the property remains in probate limbo.
Nor does this process come cheap. In the state of California,where Jeff lives, and in many other states, there are statutory probate fees—fees, that is, that are set by law. These are the first fees that have to be paid out for any estate.
What this meant for Jeff was that the court would total the value of Nancy’s estate and then charge a fixed-by-law percentage of that amount for these probate fees. The house was Nancy’s major asset. Now, Nancy had put $50,000 down on the house, and in the few years they’d lived there, she and Jeff had paid off about $15,000 of the $175,000 mortgage she had originally taken out. This left a mortgage of about $160,000. So, since the house is now supposedly worth about $300,000, their equity in the house is $140,000. The bank is owed the rest. One would think that the probate fees would be based on their equity in the house—the
codicil
, which is an additional paper enumerating your changes. Follow the same procedure as when you signed the will in the first place.
If you want, you can draw up a will yourself on a piece of paper, which will cost you nothing. This is known as a
holographic will
. Just make sure that the paper you use has no other writing on it or the will will not be considered legal. Make sure, too, that the entire will is written in your handwriting and is dated and signed by you. If you make a mistake, don’t cross it out. Start over. Anything crossed out is considered an interlineation, making the will null and void. Do not have anyone else witness a holographic will because, again, this will make it null and void. If you want to change a holographic will, it is better just to redo the entire thing.
Your will should specify an
executor
. This is the person who will make sure that all the legal, financial, and emotional matters are taken care of after you have died and that the wishes expressed in your will are carried out. Executors deal with the legal system and the accountant and all the beneficiaries. They contact the banks and insurance companies and inform them of your passing and send in the necessary documentation to change the names on all the accounts to the new owners. For tax purposes, all the property will have to be valued and the final tax returns compiled; and if any money is owed to the IRS, the executor must make sure that it has been paid or set aside before any assets are distributed to the beneficiaries of the will. In many states the executor gets a set fee for having done all these tasks, or, depending on where you live, you may just decide to specify a fee in the will.
So preparing a will is relatively simple. Where it can get complicated, as you saw with Nancy, is in its execution after you have died. All your will says is where you want your property to go. It does not necessarily get it there very easily.
After your death your will has to pass through the court system. Usually the executor has a lawyer handle this. Once the will gets to the court, two things happen. First, a judge has to authenticate the will, to make sure it is valid. After the judge probates the will, he or she will then sign a court order transferring title to the property covered in the will to the people who are intended to receive it, as reflected in the will. In Jeff’s case, for example, title to Nancy’s house would be transferred to his name once probate was completed.
This sounds easy enough, but can be a nightmare.
In the first place, the process can take anywhere from six months to two years or more, while ownership of the property remains in probate limbo.
Nor does this process come cheap. In the state of California,where Jeff lives, and in many other states, there are statutory probate fees—fees, that is, that are set by law. These are the first fees that have to be paid out for any estate.
What this meant for Jeff was that the court would total the value of Nancy’s estate and then charge a fixed-by-law percentage of that amount for these probate fees. The house was Nancy’s major asset. Now, Nancy had put $50,000 down on the house, and in the few years they’d lived there, she and Jeff had paid off about $15,000 of the $175,000 mortgage she had originally taken out. This left a mortgage of about $160,000. So, since the house is now supposedly worth about $300,000, their equity in the house is $140,000. The bank is owed the rest. One would think that the probate fees would be based on their equity in the house—the
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