“Lawyers and financial advisors recommend people write wills to ensure their wishes for transferring their property and assets are followed and to avoid protracted legal proceedings over the distribution of those assets,” Gallup wrote in a post about the 2016 poll results.
If your income is relatively high, you are more likely to have a will. Of Americans whose annual household income is $75,000 or greater, 55 percent have a will, compared with 31 percent of those with incomes of less than $30,000.
But as the findings show, even the wealthy neglect this important part of estate planning. Former Zappos chief executive Tony Hsieh, who died from complications of smoke inhalation from a house fire over the Thanksgiving holiday, didn’t have a will. He was 46 and reportedly worth almost $1 billion.
Documents filed in a Nevada court last week on behalf of Hsieh’s family said they are “unaware of the existence of a fully executed estate plan and have a good faith belief that the Decedent died intestate,” the Associated Press reported.
I was surprised Hsieh didn’t have a will. He had built a company that offered generous employee benefits, “including full health-care coverage, free lunches and on-site chiropractors and life coaches, ready to dispense a hug,” according to his obituary in The Washington Post.
Why would someone so thoughtful about creating a great environment for employees not have his personal affairs in order for his family?
Because, really, a will isn’t about you. You’ll be gone. It’s a gift to the people you leave behind.
And estate planning isn’t just for the rich.
Without instructions on how you want to distribute your assets, you may leave a legacy of chaos. In the worst cases, relationships are forever fractured, because you didn’t take the time to prepare for your death.
So, get a will. And while you’re working on it, create a “death book,” which is what one reader called information left for the person who you designate to handle your affairs.
I’ve written about this before, but here’s a recap of what you should include in your death book. (If that’s too morbid, just call it a “letter of instructions.”) Think of it like CliffsNotes for your personal and financial information.
— Your will or trust, of course. And because you know your people, if necessary, leave detailed instructions on who gets what. Yes, folks will fight over the china or your doll collection, which isn’t worth much.
— Advance health-care directives, including your living will, which details the type of medical treatment you want at the end of your life, and your health-care power of attorney, which is a document that lists who can make medical decisions for you if you can’t speak for yourself.
— A list of passwords and user IDs for your banking accounts and computer/mobile phone. To make it easier, use a password manager, which stores all your log-in details in an online safe-deposit box.
— Homeownership information, including the mortgage servicer.
— The titles to vehicles or other property.
— Retirement accounts/pension information.
— Life insurance policy information. Make sure beneficiaries are up to date. I’ve worked with people who found out that an ex-spouse was listed on the life insurance policy. The current wife got nothing.
— Leave instructions for the kind of funeral arrangements you want. Do you want to be buried or cremated?
— Include your bio or resume, which will help in writing your obituary. I know. You don’t want to think about this. But think about how much easier you’ll make it for your family not to have to hunt around for your biographical information.
— Instructions if you are entitled to military honors at your funeral. If you are a veteran, make sure you include your military discharge papers (DD214 or other separation documents). If you can’t locate the paperwork, read: Request your military service records.
AARP.org has a very useful post to help with creating a will. Search for “How to Stop Stalling On Getting a Will and Estate Plan.” There’s also a useful guide on a will for every budget. You can find free information on wills and livings wills, including a link to find an attorney in your area, at FindLaw.com. Look for the page that says “Estate Planning.”
Get a will, especially if you have children. And if it helps, don’t think of planning for your death, but creating a loving plan for your loved ones.
Reader Question of the Week
If you have a personal finance or retirement question, send it to firstname.lastname@example.org. In the subject line, put “Question of the Week.” Please note that questions may be edited for clarity.
Q: Is there any way college students claimed on their parents’ tax returns will see any stimulus money?
A: Unfortunately, under the Coronavirus Aid, Relief, and Economic Security (Cares) Act, anyone who is claimed as a dependent on another taxpayer’s return, such as a college student on a parent’s, is not eligible for a stimulus payment.
However, some recent self-supporting college graduates from 2019 and 2020 who did not receive an economic impact payment because they were claimed as a dependent by their parents or someone else may be eligible for stimulus funds (up to $1,200 under the Cares Act) when they file their 2020 tax return next year.
Retirement Rants and Raves
I’m interested in your experiences or concerns about retirement or aging. How has your retirement changed as a result of the pandemic? You can rant or rave. Send your comments to email@example.com. Please include your name, city and state. In the subject line, put “Retirement Rants and Raves.”
This week, Ron Himebaugh of Warwick, R.I., weighs in on a frequent retirement topic: Social Security.
“I don’t see how it hurts to wait as long as possible to collect Social Security if you don’t need the money now,” he wrote. “Let the benefit grow at a guaranteed rate. Where else will you get that? If you die and leave money on the table, so what? If death robs you, you don’t care: You’re dead. By delaying, there also may be a higher spousal benefit to consider if married. It’s like insurance: You paid all those premiums and didn’t need to claim anything. That’s a net good thing.”
Mark Kaplan of Reston, Va., wrote: ” I have a different way of looking at Social Security from what I mostly read and hear. I was fortunate to be able to file and suspend. I currently receive my spousal benefit, as she filed at age 62 and I plan to delay until 70. I don’t look at trying to get the most total amount as possible, but instead want to ensure that the future amount will be as large as possible should some unforeseen event decimate my current holdings. This greater amount will also provide more for my wife, should she survive me. Should we both die while leaving ‘money on the table,’ that’s fine.”