It’s the question we often ask our parents late at night around the kitchen table. Or we pose it to siblings when they become parents themselves.
“Do you have a will?”
Naturally, if you’re coping with illness, approaching retirement, or have a spouse or children, you should have a will.
But even if you’re young and feel indestructible, having a will is probably wise. Life moves quickly. So can death.
Before you rush online to download a will from the same site where you became ordained to officiate weddings, read this primer on the estate-planning documents you might want — and what they really cost.
What Exactly Is a Will?
This short glossary will help you understand terms you’ll encounter from estate attorneys, websites, and likely from friends and family.
Will
This paper names one or more executors who will wrap up your affairs after you pass away. It also specifies your directives for assets and property, and appoints guardians for minor children.
Probate
Probate court reviews and validates wills so the executor can proceed with administering the deceased person’s estate.
Living Will
Also called an advance directive, this outlines your medical preferences if you can’t communicate them yourself.
Trust
A trust establishes an arrangement where a trustee (a second party) manages assets on behalf of a beneficiary (a third party).
Revocable Trust
A revocable trust, sometimes called a living trust, lets you keep control over the assets placed into it and allows you to modify the trust during your lifetime. When you die, those assets transfer outside of probate. An irrevocable trust cannot be altered once it’s completed.
Power of Attorney
This form authorizes a named individual to make financial or medical decisions on your behalf if you are unable to do so. Unless revoked, power of attorney typically ends at death.
Estate Plan
An estate plan can comprise any combination of the documents above, tailored to your circumstances.
Will or Trust — Which Should You Choose?
It’s worth considering both a will and a trust.
Whether you need a trust depends on your state and how onerous probate is, says Kevin Ruth, former head of wealth planning and personal trust at Fidelity Investments and founder in 2019 of Give-Get, a financial-education program for teenagers.
When you die, an executor must file your will in circuit court, which makes it a public record.
“Almost every state requires you to include an inventory of assets with your will, laying everything out and revealing who gets what,” he noted. “The advantage of a trust over just a will is privacy.”
If you prefer that asset details remain private among beneficiaries, create a trust. Then the will filed in court can simply state that it covers items contained in the private trust.
“You should always have a will,” Ruth advises. “But if you have a trust, the will merely directs everything into the trust. This is often referred to as a pour-over will.”
Without a trust, probate is unavoidable. “A typical person can spend a year getting through probate,” says estate lawyer Gale Allison. Time, of course, translates into money.
“People assume you need a lot of money to justify a revocable trust,” Allison adds. “They think they’re not wealthy enough.” But the upfront cost of setting up a trust (discussed later) can save your loved ones expenses and headaches when settling your estate.
Why You Also Need Power of Attorney
Estate planning isn’t only about directing what happens after you die. It usually also includes power of attorney documents for finances and health decisions.
“Power of attorney covers everything the trust doesn’t,” Allison says. And if it’s durable — as it should be — she recommends, “it remains effective when you’re no longer mentally capable.”
Naming someone to manage your accounts if you become incapacitated may feel unsettling, but Allison points out that most of us won’t die instantly. More often there is a long illness or an accident followed by uncertainty.
“Two-thirds of us will experience a long decline,” Allison observes. “If you face that without proper planning, things get messy. It’s difficult to stretch money. It’s hard to keep a family from falling into dysfunction.”
Standard power of attorney typically ends if you become incapacitated, preventing a designated person from making unilateral decisions without your consent. Durable power of attorney, however, remains in effect if you become injured or ill and cannot decide for yourself.
What Will a Will Cost?
People make a common mistake when shopping for a will, Allison says: they call and ask, “How much for a will?”
“That’s like phoning a car dealer and asking how much a car costs,” she explains. “No one can answer until you sit down and explain what you need.”
An estate plan — possibly including a will, trust, power of attorney, health care power of attorney, and advance directive — can range “from the high hundreds into the thousands,” Ruth estimates, suggesting around $2,500 as a typical figure. “If you only get a will, that might be a few hundred dollars,” he adds.
Online services such as Rocket Lawyer and LegalZoom have simplified the process and offer wills and other estate documents tailored to state rules, with packages under $500. Individual items like a basic will or power of attorney can be as little as $25 to $50 online.
“If you don’t have kids or significant assets, those services can produce simple wills with a few questions and provide a legally valid document,” Ruth says. For more complicated situations — children, second marriages, blended families — he recommends consulting a professional.
Allison advises working with an attorney for your estate plan. “The property you own and include in your estate plan should be reviewed, titled, or transferred with the guidance of an experienced estate lawyer so you don’t end up planning for only one possible outcome,” she says. “It’s almost pointless to plan if you address just a single scenario.”
How to Make a Will When Money Is Tight
Local nonprofits and libraries often host free informational sessions where you can learn about estate-planning options. Your state or local bar association might provide complimentary short consultations with member attorneys or seminars that cover common questions about wills and trusts.
If you want a low-cost option with some guidance, Amy Pickard of Good to Go!, an advance-planning service, recommends the Five Wishes living will from Aging with Dignity. It’s legally recognized in 42 states and Washington, D.C., and costs only $5 to purchase, complete online, and print. Some states also provide free power of attorney forms.
“Most states allow you to create your own will,” Allison says. “I don’t think it’s ideal, but it’s better than having nothing.”
Kelly Martin is a former senior writer at Savinly.
