Click a blue link below to read your free article.
by Ed Olkovich
For some celebrities, diamonds may be their best friends. They probably know what to look for when buying jewels. They may be able recite the four Cs: clarity, color, cut and carat. However, celebrities’ estate troubles show they do not know the four Cs about wills.
Let me explain what they are, even if you never become famous.
Everyone, celebrity or not, must meet the same legal requirements when making a will. These rules make sure your will does not end up in a courtroom battle.
Regardless of how much money is at stake, you want to spare your family this costly nightmare.
If you don’t make a will, the government, by default, writes one for you. The government decides who benefits from your estate and who is in charge. This default system is called intestacy - when someone dies without a will.
You would be mistaken to think this is cheaper than making a will yourself.
The government’s distribution of your valuable possessions may surprise you.
For example, would you want relatives you haven’t spoken to in years to inherit your money? It’s possible. Without a will, you do not have a say in who benefits or controls your money. You also cannot save any taxes.
The 4 Cs of Making Your Will
You do not want a judge to make decisions because your will did not cover details. This can happen because you forgot to cover the four Cs. You must keep your will current and correct while you are competent and without conflict. Act responsibly and make a will that covers the four Cs.
The birth of a child is an important reason to update your will. You will want to name your child as a beneficiary of your estate and provide for a guardian.
You name guardians in your will to deal with your child's needs if you are no longer in the picture. Single parents especially need to protect their children by doing this.
Minor children are not allowed to hold property. As such, a child's inheritance must be paid into court. Only by applying through a court can money be spent for the child's needs. You can avoid this problem by naming a person in your will to hold and manage those funds.
Being current also means that your will must reflect changes in your marital status, including separation or divorce. In most jurisdictions, if you remarry and your will was not made in contemplation of marriage, it is canceled.
You also want to keep your choice of executors up to date. Executors distribute your estate to the people you name in your will. Whenever there is a change in your residence, relationships or assets, you must ensure your will is current.
Your will must comply with legal formalities. That means wills are properly signed, witnessed and meet minimum legal standards. Courts can declare your will invalid because it does not comply with the proper signing formalities. This is one of the advantages of hiring a lawyer to prepare your will.
Lawyers follow an important ritual when you sign a will in their office. There is a protocol to ensure all the legal requirements have been satisfied.
In most jurisdictions, even technical noncompliance with the legal rules cannot be waived or ignored by a judge. That means you would not have a will. So, coming close is not good enough; it must be correct.
To be able to make a will, you must be competent to understand what you are doing. Legal tradition has defined this as:
• knowing the extent of your assets and liabilities; and
• understanding who would normally benefit from your estate.
When lawyers prepare your will, they must satisfy themselves that you understand:
• what you're doing;
• what you have; and
• who is going to receive it.
Competency is a legal standard the courts call “testamentary capacity”.
If your mind or memory is affected by drugs or illness, you may not be legally capable of making a will. Your mind and health can deteriorate to the point that a lawyer may not feel comfortable acting on your instructions.
To establish competency, your lawyer may require you to undergo a medical assessment. This helps prove your mind was not affected by disease. It is part of your lawyer’s obligations to record their observations. If necessary, they must testify in court to support and substantiate you were competent.
When you prepare your will, always strive to avoid conflict among your family. Share your estate equally with your children. Otherwise, you can create a lifetime of bitterness and resentment. Worse than that, disgruntled or dissatisfied relatives can contest your will in court.
Are you considering an unequal division or cutting out a child? Protect yourself with proper legal advice to substantiate your reasons. Make sure your lawyer can document and later testify, if necessary, to justify your decisions.
Even though you may have spent a lifetime earning your money, you cannot simply do whatever you wish with it. You have legal obligations to your dependants, or your spouse or partner.
You should not try to disinherit a spouse without getting proper legal advice first.
If you ignore those legal obligations, you may find that your estate is sued by your partner. Then everyone gets separate lawyers and your estate is consumed by legal costs.
Make sure that when you prepare your will you obtain objective and independent legal advice. This means that no one with a conflict of interest is present when you give instructions to your lawyer or sign the will. This helps to show no one unduly influenced you in making your will.
What happens if there is a conflict of interest or undue influence? A court may declare the will did not reflect your true intentions.
Do you see the importance of keeping your will up to date? If you have invested in preparing a will, make sure it reflects your current wishes.
Remember these four Cs whenever you make a will. Your family and friends will appreciate you doing the right thing.
For more information about wills, read About Wills: You Need to Review These Essential Tips by Ed Olkovich.
Ed Olkovich is a Certified Specialist in Estates and Trusts law. Address your questions to Ed here. This information is not a substitute for legal, tax, or financial advice.
by Ed Olkovich
Are you using these excuses to avoid doing your Estate Planning? I call it the “too-too” syndrome. People say they’re too busy or too young to protect their families.
You might be using some of these excuses yourself. My answers will cure you of the “too-too” syndrome.
1. Too Many Choices
I can’t decide who to choose as my:
• guardian for minor children or
• my attorney for property or personal care decisions.
Well, there’s good news. There is no one rule that answers all of these questions. Everyone has a unique set of challenges and choices.
You will need to review your options with a lawyer. You can get help from my instantly available guide called
This guide shows you how to choose the right executor. You get a scorecard that uses 5 criteria to make the best selection. The tests you follow for executors also apply to powers of attorney.
2. Too Busy to Make a Will
You feel you don’t have any time to make a will. But don’t you care about your family? Making a will is what you do for the people you leave behind.
Don't leave them with a mess.
If a person dies without a will, there is no one to
• arrange a funeral
• secure custody of minor children
• take charge and protect property
• get access to money to pay bills
• care for property or pets
If you do not make a will, you can botch things badly. It may take a team of lawyers to figure out what to do.
Don't assume that without a will your spouse will automatically get everything.
Don't Let the Government Write Your Will
Without a will, the government dictates:
• who is in control of your money
• who gets it and when
• that your estate will pay the highest amount in taxes
Making a will is the most cost effective way of protecting your family. Learn more in my instantly available e-book About Wills: You Need to Review These Essential Tips. Read a free sample chapter here.
3. Too Afraid of Making Mistakes
In my law office, I see clients who have made these 7 costly mistakes. Read my book Breakthrough Estate Planning to learn how to avoid these mistakes.
Mistake #1 Never finding time to begin.
It’s not hard to get started when I break the process down for you. You'll learn the best first steps to take. Read Breakthrough Estate Planning in the comfort of your own living room. You can identify what to do for the people you care about.
Mistake #2 Not understanding how to give all your stuff away.
I’ll give you a money secret that’s easy as pie to learn. You’ll discover the keys to giving all your stuff away. I call it the estate pie solution. This approach has worked with thousands of people who have heard me speak. No one else can give you this unique and valuable insight.
Mistake #3 Failing to save taxes.
It's a mystery why people pay more taxes than they should. Reducing taxes on your estate means you leave more for your loved ones. Not taking these simple tax reduction steps is a terrible mistake.
Mistake #4 Not understanding that you need to invest in a professionally made will.
I’ll explain the 3 key decisions about making a will, executors and your beneficiaries. Learn why will kits can be a train wreck waiting to happen.
Mistake #5 Not protecting yourself from financial abuse or medical decisions.
Power-of-attorney documents must be used to protect your property and your personal care decisions. Discover how to prepare these simple documents. You can then avoid complicated court proceedings.
Mistake #6 Forgetting to consider these 3 special estate planning elements:
If you have a (1) business, you need an estate plan; otherwise, it can become worthless. Business owners need a disaster plan. (2) Life insurance and (3) gifts to charities offer tremendous tax advantages. I will show you how to include them in your estate plan.
Mistake #7 Failing to keep your estate planning documents up to date.
Nothing stays the same. Everything in your life keeps changing. You must keep your estate plan up to date or it could be worthless. You'll learn how to do this.
I can help you quickly understand the essentials of estate planning. This includes how you make wills, save taxes, choose executors, and sign powers of attorney.
All of this is available in a complete step-by-step, easy to use home study guide.
I call it Breakthrough Estate Planning. It will allow you to break free from everything that is holding you back. You can sweep away any obstacles keeping you from protecting your family and yourself.
Available for the Kindle, iPad, Nook, Sony Reader, Kobo. Also available as instantly-downloadable e-book (PDF).
These estate planning excuses no longer have to hold you back.