FAQ
Q. Why do I need a will?
Many people use their wills to express their deepest sentiments toward their loved ones. Without one, a court determines how your assets are distributed. It's also the best way to name guardians for your children.
Q. To whom should I leave my property?
A person who receives property through a will is known as a beneficiary. You can leave all of your property to one beneficiary, or you can divide your estate among several individuals. In any event, you should decide on at least two levels of beneficiaries – primary (those who will inherit your property upon your death) and secondary (those who will inherit your property in the event the primary beneficiaries die before you). You may even want to select a third-level beneficiary.
Q. Can I leave my assets to anyone I choose?
It’s not that simple. Generally, you are free to leave your property to whomever you choose. However, most states have laws that entitle spouses to at least part of the other spouse's estate. This statutory share ranges generally from one-third to one-half. Some states also provide shares of the estate to children. Insurance proceeds and jointly owned property may be controlled by other provisions of the law.
Q. What do I need to do to put together an estate plan?
Taking inventory of your assets is a good place to start. Your assets include investments, retirement savings, insurance policies and real estate or business interests. Ask yourself three questions: Who do you want to inherit your assets? Who do you want handling your financial affairs if you are not able to? Who do you want making medical decisions for you if you become unable to make them for yourself?
Q. Aren’t trusts only for the wealthy?
No. Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of probate court – which administers wills. Some trusts offer greater protection of your assets from creditors and lawsuits.
Q. How do I give charitable gifts that keep on giving?
If you donate to a charitable gift fund or community foundation, your investment grows tax-free and you can select the charities to which contributions are given.
Q. How do I give gifts tax-free?
You may give up to $12,000 a year to an individual (or $24,000 if you're married and giving the gift jointly). You also may pay an unlimited amount of medical and education bills for someone if you pay the expenses directly to the institutions where they were incurred.
Q. Does all property have to go through probate when a person dies?
No. Most states allow a certain amount of property to pass free of probate, or through a simplified probate procedure. For example, property that passes outside of a will, (through joint tenancy or a living trust) is not subject to probate.
Q. Do I need a written lease or rental agreement?
Absolutely. A lease or rental agreement is the key document of the tenancy, detailing important issues such as the length of the tenancy, the amount of rent and deposits the tenant must pay, the number of people who can live in the property, whether or the tenant may have pets and a number of other important details. Leases and rental agreements should always be in writing.
Q. What is the difference between a rental agreement and a lease?
A rental agreement provides for a tenancy of a short period (often 30 days or less) that is automatically renewed unless the tenant or landlord ends it by giving written notice. For month-to-month rentals, the landlord can change the terms of the agreement with proper written notice.
A written lease, on the other hand, gives a renter the right to occupy a rental unit for a set term – most often for six months or a year. It provides protection for the tenant, as well, as the landlord cannot raise the rent or change other terms of the tenancy during the lease – unless the tenant agrees.