The Washington Times

The Need To Draft A Will

By Gabriella Boston
Washington Times

Stephanie and Nick Chaconas of Gaithersburg, both 31, are the proud parents of two children, ages 1 and 2. While these parents naturally are celebrating the joys of their new family, they just completed a joint will, in essence, planning for their own deaths.

"Sitting there and saying, 'If all these things happened — if something catastrophic happened — this is what we want for the children,' is very surreal," Mrs. Chaconas says. "But you know you're doing the right thing. You're prepared."

Many people put off drafting a will. Their reasons vary, lawyers and financial planners say. Some parents think wills are only for old people, others think they're only for the rich and yet another group just doesn't want to face death.

"We have social and cultural customs of not dealing with death until we absolutely have to, and that spills over to estate planning, too," says Steven Hendlin, author of several books on the psychology of investing.

"People in their 30s don't think they've accumulated very much, and people in their 40s and 50s have that basic psychological resistance — they don't want think about death," Mr. Hendlin says.

Whatever the excuse, it should be thrown out the window, because everyone needs a will, says Les Kotzer, a wills and estates lawyer and co-author of "The Family Fight: Planning to Avoid it."

"A will is a way for you to ensure that the assets you have worked hard for your whole life are distributed according to your wishes," Mr. Kotzer says.

If there is no will, a surviving spouse may have to share the assets with the children, which can cause tensions, he says. Also, without a will there is no executor appointed to take care of the assets.

But it's not just about assets, Mr. Kotzer says.

"The most important aspect of having a will has nothing to do with saving taxes. It's about saving the family," he says.

In his practice Mr. Kotzer has met adult children, whose relationship once was loving, not speak to each other because they can't agree on what items each should get from their childhood home because there was no will to direct them.

"Parents make these assumptions that there will always be good will between their children," he says. "They forget that their children now have their own families, obligations and debts to settle."

Mr. Kotzer says he has also seen fights over a dying parent's wishes when there was no durable power of attorney for health and property or a living will.

These documents, which are only in effect while the testator, the person making the will, is alive, give guidelines as to the wishes of a parent who is on life-support or otherwise unable to make decisions about their health and money.

These documents are separate from a will, which takes effect upon death.
One of the most urgent concerns for parents with young children, however, is who will take care of their children if both parents die.

"We decided five years ago that we needed a will, but it wasn't until we had Lydia that we actually did it," says Denise Davenport, 41, of Falls Church.

Her daughter Lydia is 1 year old.

"It felt more urgent since we needed to make sure that she was taken care of," says Ms. Davenport, who is pregnant with a second child, due in December. The will includes subsequent children.

Appointing a guardian

While many people consider it a great privilege to be appointed guardian, it's also a huge responsibility and needs to be carefully considered, says Kevin Quinn, professor of law at Georgetown University.

"You need to have a long conversation with the person you have identified [as guardian]," Mr. Quinn says. "You have to make sure that everyone's on the same page, that this person is willing to bring the kids into their house and care for them."

There also needs to be a conversation about how the parents want the children raised, such as whether they should go to private school, Mr. Quinn says. These ideas can be included in a letter or other document, but not in the actual will, he says.

Also, in picking the guardian, Mr. Kotzer advises against picking a couple, such as a brother and sister-in-law. It's better to pick just the brother, he says.

"What happens if your brother and sister-in-law get divorced? There could be a custody battle over your kids," he says. "My advice is, only appoint a blood relative."

Lawyers also don't recommend that persons appoint their own parents — meaning the grandparents of the young children — as guardians. In all likelihood, the grandparents will die before the parents.

Mrs. Chaconas, however, ended up appointing her parents as guardians anyway. It made most sense, she says, because they live close by and are fairly young.

"They live close, in Potomac; they're both under 60; and they really wanted the kids," she says.

But Mrs. Chaconas says she and her husband plan to review and update the will every few years, a practice recommended by lawyers and financial planners as the value of assets and relationship to persons change.

It's also important to discuss the financial responsibility of raising the children. One question to consider is: Does the guardian also want to be the executor of the will, in other words, does the guardian want to take care of the assets of the deceased, too?

In Ms. Davenport's case, the guardian and the executor are the same person.
"It was an easy decision to make. We picked my brother-in-law because he's the most rational," she says of her husband Forrest's brother.

The brother also has a daughter who is Lydia's age and lives in the D.C. area.

Picking executor, trustee

Many financial planners and lawyers, however, recommend appointing one person as guardian and another as executor of the will.

"It creates more of a checks-and-balances approach to the will," Mr. Kotzer says.
Michael Gannon, vice president of trust administration for First Horizon Bank in McLean, agrees and says it takes some of the pressure off the guardian not to have to take care of the money, too.

"The guardian may already be overwhelmed by all the responsibility of taking care of the child," Mr. Gannon says.

He says having one person be guardian and another be the executor creates more of a "team approach," allowing the two to use each other as sounding boards for financial and child-care decisions.

Some people choose a financial institution, such as a bank, to be the executor and/or trustee. The cost for this service is often around 1 to 1½ percent of the entire estate once the estate is dissolved, says Lynette Jones, vice president for trust sales for First Horizon Bank.
In crafting the will, it's important to try to calculate the cost of bringing up the children, Mr. Gannon says. If the estate — the money and other assets left by the parents — is not large enough to cover the child's necessities, it may be wise to increase the amount of life insurance, he says.

Some people also choose to set up a trust within the will. The trust is handled by a trustee who can be the same or different person from the executor, whichever the testator chooses. The trust is separate from the estate in that it deals only with money for the child or children, Mr. Gannon says.

The trust can be set up so the child doesn't get all the money in a lump sum when turning 18 or 21, but rather in increments, Ms. Jones says.

"It's becoming more common that people divide it up," she says. "The children get one-third when they're 25, one-third when they're 30 and then the trust will dissolve when they're 35."

Getting it done

Drafting a will may not seem urgent to young people, but it should be part of a person's "overall financial game plan," says Ms. Jones.

"Too often it's at the very bottom of the list," she says.

Mr. Hendlin, the author of books on psychology and investing, says some people think that crafting a will somehow brings them closer to death.

"Many people are superstitious. Their belief is that if they talk about something it will happen," Mr. Hendlin says.

But for those who have shed their superstitions and procrastination and are ready to craft a will, how do they get started?

Ms. Jones and Mr. Gannon suggest talking to a financial planner at a bank first. The bank usually doesn't charge for the service, and it will give the testator some information to consider, such as size of estate and possible need for life insurance, they say.

Some people choose to craft their own wills, by themselves, using books on the topic and computer software. This is not a practice that lawyers and financial planners recommend.
"Our advice on do-it-yourself wills, is 'Don't,' " Ms. Jones says.

Mr. Quinn says the only candidates for homemade wills are people with readily accessible assets and no conflicts within their families.

"I think the do-it-yourself wills are a little suspect, but maybe someone who has a very simple estate and no recognizable tensions between the takers could be a candidate," Mr. Quinn says.

Mr. Kotzer, however, says he has never met a good candidate for a homemade will.
"One word in a will can destroy a family," Mr. Kotzer says. "Someone writes, 'I leave my memorabilia to my son.' Well, what does 'memorabilia' mean? You end up with a court fight, and once you get lawyers involved, the relationship between your children will never be the same again."

So, not having a will can end up costing much more in lawyers' fees than going to a lawyer up front to have a will crafted, he says.

Mrs. Chaconas says she called about five lawyers, whose fees ranged from $100 to $500 per hour. She ended up picking one who charged $200 per hour and estimates that her final bill will be between $2,000 and $2,500.

Mr. Quinn says the testator needs to take into account the size of the estate when picking a wills and estate lawyer. If the estate is large, pick a lawyer from a large, reputable firm; if it's small, call the local bar association and get a recommendation, he says.

Bank personnel can also make a recommendation for a lawyer, Mr. Gannon says.

Ms. Davenport picked a lawyer from a roster supplied by her place of work, an association for energy companies.

She offers the following advice to those who procrastinate in crafting their wills: Thinking and talking about the will with her husband and later with the attorney did not consume much time or — to her surprise — emotional energy.

"It's more terrifying for me to think about what would happen to Lydia if we didn't have a plan, than thinking about my own mortality," Ms. Davenport says. "There's a certain comfort in having a plan."


Glossary —
• Estate planning covers the transfer of property at death as well as a variety of other personal matters and may or may not involve tax planning. The core document most often associated with this process is your will.
• A will provides for the distribution of property owned by you at the time of your death in any manner you choose. A will is subject to state laws, some of which prevent disinheriting a spouse and, in some cases, children.
• A testator is a person who has made a valid will. A woman is sometimes called a "testatrix."
• A guardian is the person you assign to take care of a minor child or children if you and your spouse die.
• A fiduciary is an individual or trust company that acts for the benefit of another. Trustees, executors and personal representatives are all fiduciaries.
• A beneficiary is a person for whose benefit a will or trust was made; the person who is to receive property, either outright or in trust, now or later.
• The term trust describes the holding of property by a trustee, which may be one or more persons or a corporate trust company or bank, for the benefit of one or more persons called beneficiaries.
Source: Web site for the American Bar Association, www.abanet.org.

More info:

• "The Family Fight: Planning to Avoid It," by Barry Fish and Les Kotzer, Continental Atlantic Publications Inc., 2003. This book, featuring plain language, focuses on strategies that can be used to avoid or minimize conflict in the family. This book can be ordered by calling 1-877-439-3999.