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NS-When A Will Is Necessary
Jan L. Warner & Jan Collins

Question: My husband and I are in our early 60s and, after reading your column for several years, went to a lawyer to have our documents prepared. We were very disappointed that this attorney seemed ill-prepared. He tried to talk us into a trust and was not even up to date about income and estate taxes. We have a family farm, a now-decimated stock portfolio, retirement, annuities, life insurance and rental property. Our son works with us on the farm. Our daughter married a physician, has two children and is well-off. What exactly do we need, and how do we find a lawyer who has some sense?

Answer: Apparently, you chose a lawyer who did not have either the experience or expertise to deal with the issues facing you and your husband. It seems you want to make sure the farm remains available for your son.

What you need depends on what you own, the character of the assets and how the assets are titled. Generally, there are three documents that every person needs: a durable power of attorney for financial purposes, a healthcare power of attorney and a will (In some cases, trusts are preferred or, depending upon your insurance, necessary.)

A will directs how and to whom your probate estate is distributed at your death. Without a will, your assets are distributed according to the law of your state. If you die with a will, you are deemed to have died "testate." If you die without a will, you are deemed to have died "intestate." If you have a will, you have the right to choose an executor or personal representative to handle your affairs; if you don't, the probate or surrogate court will choose this person to handle your estate based on the priority established by statute.

If you have an estate worth more than $3.5 million, and one of you dies this year, the estate tax will be avoided until the second death -- if your estate documents are properly prepared. However, since no one knows what Congress and the president will do to the estate tax, future planning is essential through techniques you can use during your lifetime.
Under the law in effect now, the estate tax applies to single Americans and those who have lost a spouse this year with a net worth of more than $3.5 million. It has been estimated that more than 2,500 estates will be taxed this year. Under current law, the estate tax will be repealed for 2010, and then the estate tax will go back to $1 million in 2011 -- which is estimated to result in estate taxes for more than 50,000 people. There is no estate tax due at the death of the first spouse.

-- You have minors, adult children or grandchildren with special needs.
-- You want to control where your assets go at your death rather than allow a statutory disposition based on your state law.
-- You want to avoid possible litigation among family members.
-- You are separated or divorced.
-- You are getting married for the second time.
-- You own a closely held business or farm you want to pass on to a child who is helping you.
-- You care about who will administer your estate. Unless your plan is included in a will, it will be impossible for anyone to distribute your property as you desire, and you should assume that there will be litigation over your estate -- especially if you own real estate and other non-divisible assets.

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