Ask Liz Weston

Get smart with your money

DIY estate planning

Q&A: Do I need a will if I don’t have much money?

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Dear Liz: I have less than $5,000 in my savings account, a 12-year-old car and a mortgage with a $200,000 balance. I am 67 and can’t decide whether to make a will. I live alone and have no children. I have three siblings, but am only close to one. I hate to spend money on an attorney when I can use that money to cover funeral expenses. I’m leery of using an online will service. Can you recommend an inexpensive way to get my affairs in order?

Answer: Anyone who can afford to pay for estate planning help probably should. This is a complicated area, and it’s easy to make mistakes that can make settling your estate unnecessarily costly or difficult.

If you can’t afford to pay for help, though, there are low-cost and free options you can explore.

Start by creating an advanced directive, which details what kind of care you want should you become incapacitated and can’t speak for yourself. You can create one for free at PrepareForYourCare.org. Every adult should have an advance directive, also known as a health care power of attorney.

Another document every adult should have is a financial power of attorney, which allows another person to manage your finances if you’re incapacitated. You can create one at FreeWill.com, a site supported by nonprofit organizations. The site will also help you create a simple will for free.

LegalZoom, Rocket Lawyer and Quicken Willmaker are other options that can help you create estate documents, typically for less than $100.

An aging father chafes at a daughter’s request for financial safeguards

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Dear Liz: I am 88. My wife who is 81 has Alzheimer’s but not so bad that we cannot do most things together as before. My younger daughter, an attorney, wants me to sign an agreement that will make it a little more problematic for me to access my substantial financial accounts. She thinks somehow I will get tricked into giving the money to some scam artist. I like the idea of being protected but do not care to have her being able to decide if I can spend my own money as I see fit. She says the document can be deleted by me at any time, but I still feel put upon.

Answer: Take this document to your estate planning attorney for a review. The attorney can help you assess whether this is the best approach or if there are other ways to keep you safe.

If you don’t have an attorney, get one. Estate planning is not a do-it-yourself endeavor when you’re both in your 80s and one of you has dementia.

You’re understandably in a “live for today” mode. You’re focusing, for example, on what you and your wife can still do, rather than on the cognition she’s lost or the losses yet to come. Your daughter’s focus on the future may feel like an imposition, but the reality is that you won’t become less vulnerable to fraud, scams and plain bad decisions as time passes.

Q&A: Are living trusts a DIY project?

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Dear Liz: I have a living trust. I’ve also got family who have become estranged and priorities that have changed in terms of charities I’d like to benefit. Is there any way to set up a trust that allows me to make these changes without having to pay an attorney?

Answer: There are certainly do-it-yourself options for estate planning. But if you can afford to pay for expert help, why wouldn’t you? Estate planning is complicated, and the cost of making a mistake can be significant. That’s especially true if there are disgruntled family members who could challenge your estate plan.

The good news is that updating a living trust typically costs a lot less than setting it up in the first place. As mentioned in previous columns, you should consider having an attorney review your trust about every five years, and after major life changes.