PORTLAND, Maine — What legal paperwork do you need to prepare so your family is protected should you die?
Notice for the person who is completing a Maine will:
1. This statutory will has serious legal effects on your family and property. If there is anything in this will that you do not understand, you should consult a lawyer and ask the lawyer to explain it to you.
2. This will does not dispose of property that passes on your death to any person by operation of law or by contract. For example, the will does not dispose of joint tenancy assets or your spouse's elective share, and it will not normally apply to proceeds of life insurance on your life or your retirement plan benefits.
3. This will is not designed to reduce death taxes or any other taxes. You should discuss the tax results of your decisions with a competent tax advisor.
4. You cannot change, delete or add words to the face of this Maine statutory will. You should mark through all sections or parts of sections that you do not complete. You may revoke this Maine statutory will and you may amend it by codicil.
5. This will treats adopted children as if they are natural children.
6. If you marry or divorce after you sign this will, you should make and sign a new will.
7. If you have another child after you sign this will, you should make and sign a new will.
8. This will is not valid unless it is signed by at least two witnesses. You should carefully read and follow the witnessing procedure described at the end of this will.
9. You should keep this will in your safe-deposit box or other safe place.
10. If you have any doubts whether or not this will adequately sets out your wishes for the disposition of your property, you should consult a lawyer.
Other Important Must Do to Protect Your Loved Ones
1. Select someone you trust and appoint them as executor/trustee of your will.
a. Your executor should be a person who is skilled in financial matters and who has a good understanding of your assets, your family situation and is someone you trust will carry out your wishes and manage your assets as you have directed.
b. You can appoint more than one executor so they can help each other or you can name an alternate executor, should your first choice is not able to perform his or her duties.
2. Name someone as a medical and financial powers of attorney
a. This includes a living will stating your wishes for medical care, and a durable health care power of attorney, which names someone to make decisions if you can’t.
b. This designates someone to handle your financial affairs. The document can be written to apply broadly or kick in if you’re incapacitated.
3. Keep your papers organized
a. Get a personal binder to keep all your important papers together.
4. Download your credit report
a. This should be done every year and added to your personal binder.
5. Name a beneficiary on your bank accounts
a. If you pass away suddenly, unless you have assigned a beneficiary to your account(s), your family will not be able to obtain any of those funds if necessary.
6. If possible, bump up your 401(k) by 1%
a. Contributing just 1% more of your paycheck toward a 401(k) will add thousands to your retirement savings. If your employer matches contributions, increase yours to the maximum amount it will kick in. Otherwise, you’re leaving free money on the table.
7. Start an emergency fund and put some money aside for funeral expenses.
a. There are immediate costs that your loved ones will incur when a loved one passes. If you haven’t pre-paid for these costs, setting aside funds that will allow them to pay for funeral costs is important. A minimum of $1,500 should be set aside. Depending on what type of funeral arrangements are expected, the costs could run up to $25,000.
8. Double-check your life insurance beneficiary
a. If you never named a specific person to inherit and just assumed it would be the person named in your will (i.e. your spouse or children), then all of your life insurance benefits will have to go through a long and expensive court process, called probate.
9. Create a will and have it reviewed by an estate attorney
a. Estate planning goes beyond drafting a will. Thorough planning means accounting for all of your assets and ensuring they transfer as smoothly as possible to the people or entities you wish to receive them. Along with implementing your plan, you must make sure others know about it and understand your wishes.
10. Make changes as needed
a. Family units change. Be sure to update your will if there’s a new baby in the family or if you go through a divorce.
11. Review annually
a. Set a date each year to go over your personal folder. Update your credit reports, verify everything is included, add any assets that may not be in your current will, then get a copy to your estate attorney with any update. Also, be sure to give a copy of the updated will to the person you have entrusted as the Executor.
The Bottom Line
Procrastination is the biggest enemy of estate planning. While none of us like to think about dying, improper or no planning can lead to family disputes, assets going into the wrong hands, long court litigation, and excess money paid in estate taxes. So, set a date, and get started.
To quote Benjamin Franklin, “By failing to prepare, you are preparing to fail.”