2022 AFBA Financial Planning Guide

present serious financial problems and possible future hardships to your survivors. Since your will is an important legal document, you can often do more harm than good by trying to write it yourself without the benefit of legal guidance. For your convenience, the following list of “do’s and don’ts” should be kept in mind when planning your will: a. Do not write it yourself unless you are a lawyer. The omission of a single word or important phrase could cause your survivors considerable problems or expense. b. Do not change your will by simply lining out items and writing in the new information without getting legal advice — this is a blunder which could invalidate the will. c. Do not sign more than one copy (the original) of a will. d. Do not select a personal representative or executor (the person designated to carry out the terms of your will) based on sentiment. It is wise to choose a trustworthy individual who has good business sense. It is also important to select a reliable alternate personal representative. While most people appoint their spouse as a personal representative, this is not always the best choice. Keep in mind that he or she will usually have a multitude of other problems to take care of upon your death and trying to handle your estate might be beyond his or her capability during the emotional period immediately following your death. While having a will is important, it is equally important to ensure that it is kept up–to–date. You need to review it periodically and, when necessary, make changes. This is especially true in light of continuing changes in estate tax laws. A few situations which might dictate that a review and

f. A list of the social security numbers issued to you, your spouse, and your children. You should also indicate the location of the social security cards issued to you and your spouse. g. All original copies of property and real estate deeds, mortgage liens, titles, etc. It is also important to have duplicate, certified copies of these documents. h. Registration papers, tax certificates, and titles for all automobiles, boats, and recreation vehicles. i. A copy of all life insurance policies on yourself, your spouse, as well as any policies on your dependents. j. A list of all financial securities and investment items. k. A list of all checking and savings accounts, as well as all safety deposit boxes. l. A copy (or certified copy) of all church records such as marriage certificates and baptism records. m. A copy of all important military records. This should include all active duty and promotion orders, dates of service and promotions, Certificate of Release or Discharge from Active Duty (DD 214), and retirement orders (especially if you retired because of a disability). n. Copies of all other valuable or important papers which would be difficult to replace if they were lost, stolen, or destroyed. Table 9–6 provides a suggested system for organizing your personal documents. 9–2. WILLS. Every adult member of your household should have a current will — regardless of how little he or she might own. If you are married, it is extremely important that both you and your spouse have a will and that it be kept up–to– date. The expenses you incur for having a professionally prepared will usually provide a large dividend when it is time to settle your estate. It might save your survivors a small fortune in estate or death taxes. It will definitely save your survivors the trouble and expense of repeated court trips and related legal costs. When you die without a will, you are said to have died intestate. If you allow this to happen, your estate will normally be settled and distributed according to the laws of the state in which you died. While the laws vary from state to state, it is important to remember that most states are keenly interested in collecting taxes on estates. They look at the situation as being the last chance they have to collect taxes from the deceased person. Aside from the desire to avoid taxes, disposing of your estate according to state law could

update are necessary include: a. Change in marital status;

b. The birth or death of an immediate family member; c. Moving to a different state or to a foreign country; d . The personal representative named in your will dies or can no longer be considered competent; e. A guardian for a minor child must be named or a new guardian must be appointed; f. You acquire additional property of high value. 9–3. ESTATE PLANNING. Your estate consists of all the property you own at the time of death. Probate is the process by which the executor of your will distributes this property.

CHAPTER 9: IMPORTANT PAPERS, WILLS & TRUSTS

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