When it comes to the people you love, you’d do almost anything to ensure they’re taken care of. Even fill out forms. And if you have loved ones, there are a few crucial financial forms you will need to fill out to protect those you care about.
Luckily, you don’t always need to see an attorney—or pay expensive fees. Some forms are so simple you can download them and fill them out yourself within minutes, at no cost.
Then again, some forms—and some family situations—are complicated enough that you definitely should enlist professional help. We spoke to Yana Feldman, an estate planning attorney based in Garden City, New York, who told us when to DIY and when to call an attorney.
One thing she did tell us definitively: Never entrust your estate planning to online services like LegalZoom. These services still cost money … and don’t provide the eagle eye of an attorney to ensure you cross every last T just so.
Here’s when Feldman says you should call a lawyer like her—and when you can easily DIY for free:
Don’t Call Me If...
You’re looking for a living will.
And you should be. Regardless of age and health, every adult in the U.S. should fill out a living will, health care proxy and HIPAA authorization. A living will specifies the medical treatment you want, in case you can’t voice it yourself. This would prevent an expensive and heartrending experience for your family (think Terry Schiavo). Also, designate someone you trust as a health care proxy who can carry out your medical wishes, and sign a HIPAA authorization form, which would provide her with access to your medical records in case of emergency.
How to DIY:
1. Learn the regulations for living wills and proxies for your state here.
2. Search online for your state’s living will and proxy forms (search “[your state] + living will form”).
3. Fill out the forms and have them signed by the proxy you’ve chosen as well as any witnesses your state requires.
You need to assign beneficiaries to all of your assets. How to DIY:
Beneficiaries are the loved ones you’d want to have your money if—heaven forbid—something happened to you. Naming beneficiaries takes only a few minutes for assets like life insurance, checking, savings or brokerage accounts. So, you don’t need a lawyer to draw up a will if all your assets already have assigned beneficiaries, or if you can easily decide who you want to receive what. (If you can’t decide how to easily split up your assets, keep reading.)
1. Figure out which of your assets do and don’t have beneficiaries already.
2. Call your bank and ask what forms you need to assign beneficiaries. These can include 401(k)s, IRAs, life insurance policies, investment accounts, checking and savings accounts.
3. Decide who you want to inherit each asset. If you’re married, we recommend naming your spouse. If you’re unmarried, consider your adult siblings or your parents.
4. Fill out the forms (all you need is the beneficiary’s name, date of birth, contact info and possibly Social Security number). Mail or fax the forms back to your bank.
For more information on choosing beneficiaries, read this
You have children and are not planning to draw up a will.
If you have children, you’ll want to make sure they’re protected in case you or your partner can’t care for them by naming a guardian. If you don’t take care of this, you run the risk of the court choosing someone who’s not your ideal choice. (That third-cousin-twice-removed whom you haven’t spoken to in a decade?) If you name someone, the court will still need to vet your choice, but the judge will most likely appoint the person you selected. If you are going to draw up a will (see “Call Me If …”), your lawyer will include guardianship in your will. If you are not planning to create a will, you can fill out guardianship forms yourself.
How to DIY:
1. Decide who would best serve as guardian for your children. Think about whether that person should also be responsible for overseeing the money you leave to your children. (Read this for more on what to think about when looking for a guardian for your children and your finances.)
2. Once you raise the question of guardianship with the person you’ve selected, go to your local family or surrogate’s court to pick up guardianship forms.
3. Fill out and submit the forms. You will need the signature of both parents and the name of the person you’ve appointed guardian.
Maybe Call Me If... You’re not leaving a very big inheritance.
If you’ll be leaving behind relatively little in property and assets and don’t want special provisions (i.e. everything can go to your spouse and children; you don’t need to specify that your piano goes to your third-cousin-once-removed), your family may be able to bypass expensive legal proceedings after you’re gone.
How to DIY: Your relationship status has (or is about to) change.
1. Find out if your estate qualifies as a “small estate” here. If not, read the “Call Me If…” section below.
2. If your estate qualifies, think about whether there’s likely to be arguing among your potential heirs (spouse, kids, siblings, etc.) after your death. If so, go down to the “Call Me If …” section below.
3. If your estate qualifies and you feel confident that your heirs can handle themselves peaceably, you’re good to go: Your family can go to their local probate court, fill out a small estate form in the month after your death, submit it to the court and distribute your assets without expensive legal fees or long court proceedings. It differs from state to state, but as a general rule, they will need your death certificate, a family tree, copies of bank statements listing assets and copies of any bills or outstanding debts.
Discuss this with adults in your family now, so they’ll know what to do in that event.
If you and your fiancé have a significant income disparity—or one of you expects to inherit a lot of money—consider seeing an attorney for a prenup. (You can also get a postnup if you are recently married.) Although this may sound “unromantic,” a formal agreement means that you can have a blissful marriage without worrying what would happen financially if ever you got divorced. Learn more about prenups here
. Meanwhile, if you’re recently divorced and had a will drawn while you were married, review it again. If you want to change any terms now that you’re no longer married, call your attorney to make revisions.
DIY a cohabitation agreement, however, if you’re getting ready to move in with someone who’s not your spouse.
How to DIY:
1. Discuss what would happen if you broke up: How would the moving out process and shared possessions shake out?
2. For more ideas about topics to address in a cohabitation agreement, read LearnVest’s CFP Lauren Lyons-Cole’s story here.
3. If your relationship does come to an end, follow the cohabitation agreement as closely as possible to ensure that the moving out process is as painless and easy as can be.
Call Me If...
You haven’t assigned “power of attorney” to someone you trust.
Everyone should have this important document on hand. If an illness or accident leaves you unable to take care of your finances, you’ll want someone you trust to manage your money: pay your rent or mortgage, your credit card bills and—importantly—your medical fees. See a lawyer to draw up a “power of attorney” document. While this form is available online, the standard form does not grant a few specific powers that could be very important if your designated person actually did need to use power of attorney, such as accessing a safe deposit box or setting up a trust. Seeing an attorney for this can cost between $150 and $500, but if you were incapacitated and didn’t grant someone power of attorney, the legal proceedings would be much costlier ($5,000 and up).
Your heirs are likely to fight among themselves.
People squabble about money, even small amounts of it. If you think your heirs will fight it out among themselves after your death, see an attorney to draw up a simple will, in which you will name an executor. A lawyer will be better able to understand how the money you leave will affect your heirs and how to arrange your estate to prevent any squabbling. The lawyer will also be able to help you choose the best executor, who should be the person who is most able to divide up your assets and manage the inheritance without causing rancor among your heirs. If you don’t draw up a will and your family wages a battle over your estate, the legal proceeding will be longer, more painful and probably costlier than anyone would like.
You can’t decide how to divide your assets or want to make special provisions.
If you have very specific wishes about how your estate will be handled after your death, see an attorney to draw up a will. For example, say you wanted to split your assets evenly between your three children, but one of them has a history of financial issues and can’t be trusted with money. With a will, you could assign a trustee to manage the money for him, so he doesn’t squander it. Similarly, if you want to specify individual possessions (your grandmother’s china should be passed on to your niece, your paintings should go to your second son, etc.), you should see an attorney to draw up a will.
You’re leaving an inheritance for a child with special needs.
If your child needs to be taken care of after you’ve passed away—and you plan to leave an inheritance—see an attorney who specializes in special needs. For example, leaving behind as large a sum as possible may seem like a good idea, but if your child depends on Medicaid or other government programs, getting an inheritance could actually disqualify him. Even if all you have is a life insurance policy, you should see an attorney to set up a special needs trust, which is too complicated to DIY. This will help you to provide for your child in the best way possible, even after you’re gone.
You have a sick or elderly parent who doesn’t qualify for Medicaid.
Medicaid is a government program that provides benefits to the elderly and sick, including at-home care. But without this help, these costs can be very expensive. If you have an elderly parent who doesn’t qualify for Medicaid because of her income or assets (research Medicaid laws by state here), speak to an attorney who specializes in elder law. An attorney may be able to arrange your parent’s finances to help her qualify for Medicaid, easing emotional and financial stress for both you and your parent.
You qualify for the estate tax.
The estate tax is levied on really large estates after a person’s death. Since 1977, less than 2% of the population each year has left estates large enough to be taxed; the federal estate tax currently applies to estates worth $5,000,000 or more. Read this to find out if your state currently has an estate tax. If you’ll be subject to state or federal estate taxes, speak to an attorney to organize your assets and ensure that your family and friends—rather than the government—inherit as much as possible.
Yana Feldman is an attorney with Karol, Hausman & Sosnik, P.C., an estate planning firm based in Garden City, N.Y. Feldman specializes in elder law, Medicaid planning, and estate and trust planning.
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