Ask Liz Weston

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wills

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.

Q&A: Don’t make handwritten will changes

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Dear Liz: I have a question about wills. Since circumstances change over time, is it permissible to make “pen and ink” changes to a will? For example, can I cross out a beneficiary that no longer applies and date and initial the cross out?

Answer: Think about how easy it would be for someone else to alter your will with a pen and a reasonable facsimile of your initials. Then you’ll understand why states typically require people to be a little more deliberate about changing their estate documents. Even when handwritten changes are allowed, they’re usually not advisable. Any money you save by not seeing an attorney could be spent many times over in legal fees, since handwritten changes would be susceptible to challenges in court. Is that what you really want for your heirs?

Small alterations to estate plans can be handled with properly drafted and witnessed documents known as codicils. But you’re often better off creating a new document and revoking the old one, especially when changing beneficiaries.

Friday’s need-to-know money news

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Today’s top story: How to leave Crypto to a loved one. Also in the news: Black Friday return policies, the October jobs report gives tired travelers a glimmer of hope, and the unexpected way bad credit messes with your life.

How to Leave Crypto to a Loved One
If you don’t make a plan for your cryptocurrency, it could be lost after you die. Here’s how to make sure it gets passed down to a loved one.

As You Shop Black Friday, Keep Return Policies in Mind
Before making purchases this holiday season, consider retailer return policies to save time and money.

October Jobs Report Gives Tired Travelers a Glimmer of Hope
The travel industry is experiencing significant job growth, according to October 2021 Bureau of Labor Statistics figures.

The Unexpected Ways a Bad Credit Score Messes With Your Life
Looking beyond mortgages and car loans.

Thursday’s need-to-know money news

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Today’s top story: When a will won’t work. Also in the news: 6 gift categories unaffected by supply chain delays, 3 ways to tap the unexpected equity in your leased car, and alternatives to backdoor Roths.

When a Will Won’t Work
Consider the limitations of a will when making arrangements for your final wishes.

6 Gift Categories Unaffected by Supply Chain Delays
Products from local businesses, handmade items and digital gifts are among the categories unaffected by delays.

3 Ways to Tap the Unexpected Equity in Your Leased Car
Despite new restrictions on selling to a third-party dealer, you do have options for accessing leased car equity.

Congress Is Targeting Backdoor Roths. Here Are Some Alternatives
The backdoor Roth, or Roth conversion, helps high earners move money into investments that can grow tax-free.

When a will won’t work

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A will allows you to distribute your worldly goods, select a guardian for minor children and name an executor to carry out your wishes.

But you should be aware of what a will can’t or shouldn’t do. This is particularly true if you’re drafting your own document without an attorney’s help, since you could unknowingly make a mistake that upends your whole estate plan.

In my latest for the Associated Press, learn what a will can, cannot, and shouldn’t do.

Q&A: Pitfalls of unequal will distributions

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Dear Liz: You’ve written that when writing their wills, parents should be careful about leaving unequal distributions to their children. What wasn’t mentioned was that a person could have a “good” child and a “bad” one. The “bad one” has never done a thing for the parent, such as inviting her to the child’s home at Thanksgiving or Christmas, and only visits the parent in the summer when the parent just happens to live at the beach. The “good” one is very attentive and visits the parent even in winter, and so on. What is your thinking in inheritance in this case?

Answer: It’s your money, and there’s no one right way to divide an estate. However, it’s disturbing that your assessment of your children seems to be based solely on how much attention you get.

It’s possible one child acts more selfishly or thoughtlessly than the other. It’s also possible that you are difficult to please, and one child understandably limits the time she spends trying to do so.