The second biggest mistake is making a will that doesn’t work for you or that doesn’t work from a legal standpoint.

BEGIN WITH THE BASICS

Start by getting organized: outline your objectives, determine the value of your property, inventory your assets, estimate outstanding debts, and prepare a list of family members and other beneficiaries. There are a number of questions you should ask yourself, such as:

1. Do I need to make special provisions for any of my heirs?
2. How can I pass on my property in most tax-efficient way?
3. Would a trust best provide for my spouse and /or children?

GUARDIANS AND EXECUTORS

Among the most important items in any will are naming a guardian for loved ones under your care and choosing an executor.

The most common reason to name a guardian is to care for minor children. But, if you have a disabled adult child, parent or spouse who is your dependent, you must also think of who will care for them when you are gone. An individual – not a couple – is preferable, because a court battle could ensue if the couple breaks up at some later date. Talk to the guardian ahead of time about what you are asking, and understand that is you don’t name a guardian, a judge may end up doing it for you.

Your executor undertakes responsibilities that range from paying creditors and outstanding taxes to notifying all interested parties and agencies of your death and distributing your assets according to your will.

OTHER CONSIDERATIONS

To ensure that your will truly reflects your intentions, you may also want to consider:

A residuary clause: you might live for many years after creating you will, and you’ll want to think about what happens to any property you may acquire during that period. By including a residuary clause in your will, and you’ll want to think about what happens to any property you may acquire during that period. By including a residuary clause in you will, you can determine who should receive property not specifically mentioned.

A living will: You need to indicate if you want your life prolonged when close to death or permanently unconscious. Appoint someone to make health care decisions if you cannot make those decisions your self, and discuss your intentions with family.

ESTATE TAXES

Changes in federal law governing estate taxes that began in 2002 will continue to have an impact on everyone who has amasses wealth. Estate taxes will be gradually reduced and then repealed altogether in 2010, only to be reinstated in 2011 unless Congress takes additional action. The amount of assets exempt from estate tax will also be increased to a maximum of $3.5 million in 2009.

Though it’s too complex to adequately cover here, the Economic Growth and Tax Relief Reconciliation Act of 2001 may significantly affect you. It’s important for high income earners to understand the issues involved when making their wills.

For married people, one of the simplest ways to reduce federal simplest ways to reduce federal estate taxes is to retitle jointly owned assets – such as stocks and bonds – in the name of the spouse. A systematic gift giving program can also reduce estate taxes, as can charitable donations.

THE BEST ADVICE IS LEGAL ADVICE