Ask Liza: Everyday Estate Planning

Recently, a family in California learned the hard way that leaving a holographic will -- a will written by hand -- can cause a heap of trouble. When Homer Williams passed away, he left no formal will - but he did leave a notepad in the top drawer of his desk on which he had written " Last Will etc. or What? of Homer Eugene Williams."

Underneath that, he wrote his address, he named his step-daughter and sister-in-law to be his executors, and he named his step-daughter have power of attorney. He left "all my collectibles" to his nephew and wrote that he wanted his step-daughter "to be able to live in the house as long as she wants before putting it up for sale." Although he mentions his step-daughter three times, he never mentions his biological children who - to no surprise - claimed that their father died without a will. Also to no surprise, the step-daughter wanted the notebook pages admitted to probate as his will. Holographic will standards are lax. It may seem unlikely that notes jotted down in a notebook could serve as someone's will, but the requirements for holographic wills are quite lax. In California, where Williams lived and died, a holographic will is valid if the signature and material provisions are in the handwriting of the will-maker. That's it. The signature doesn't have to be at the end and it doesn't have to be in a particular form - it doesn't have to match other signatures and it doesn't have to be at the end of the document. No specific words are or actions are required. The whole document could literally just be a few lines written on the back of an envelope.

Why do we need formal wills? So what's the problem, why shouldn't we all just write wills on a legal pad and leave it in the top drawer of our desk? The case at hand shows us why: No one will ever really know if Williams intended that paper to be his will. On one hand, you can hardly believe that he intended his notes be the final word on his estate. The title contained a question mark, he doesn't mention the majority of his property, he didn't sign or date it, and the next entry in the notebook was a list of movies. On the other hand, he left no other formal will, so this is the only written clue as to what he wanted. Also, the facts of the case indicate that Williams was much closer to his step-daughter than his biological children. So instinctively, you want the pages in the notebook to be his will -- because at least then she'll get a little something for the last 17 years she spent caring for him. Fortunately for the step-daughter, the court found that the pages of William's notebook met the requirements for a holographic will and it admitted them into probate. But the reality is that no one will ever really know what Williams wanted -- because he never officially made his will. And the notes that he did leave spawned an extensive legal battle that cost his family lots of time and lots of money, for an outcome that, though perhaps just, still leaves you wondering. So here's the bottom line: A handwritten will may seem like a good idea because it is simple and easy to make. But only a formal will - typed, signed and witnessed - clearly indicates to your loved ones (and the court) that you've made a thoughtful and final determination about who should receive your estate.

To learn more about wills and what makes them legal, see Nolo's Wills area.

If you've been near a newspaper lately, you probably know that Leona Helmsley, famed luxury hotel owner and so-called "Queen of Mean," left $12 million in trust for her little dog Trouble. Her chauffeur got $100,000. Two of her grandchildren got zero.

We all love to read about the crazy wishes of the ultra-rich. (Or the rich wishes of the ultra-crazy, as the case may be.) But are there possibly any lessons for the rest of us in the tale of millions left to a Maltese?

Maybe. First, don't make any gift in your will that's likely to provoke a court challenge from disgruntled relatives or other beneficiaries. Generally, you can do what you want in your will. You don't have to leave anything to your grown children, for example, if you don't want to. But if you make a gift that's excessive for accomplishing its purpose--for instance, a trust fund for a pet that's far, far larger than anything necessary to take fabulous care of the animal--other beneficiaries are likely to challenge it, and a judge may cut down the amount. (If that happens, the extra money would probably go to certain other beneficiaries named in the will.)

Second, wills are public documents. Don't put anything in them that you wouldn't mind the world knowing. Just ask the Hemsleys: As soon as Leona Helmsley's will was filed with the court after her death, it appeared online for everyone to see.

Mary Randolph

Recently a parent at my child's school talked to me about making her will--or rather, not making it. She knows she ought to, but she and her husband got stuck when it came to naming a guardian for their two kids. "His family is better with money," she told me, "but mine is more fun!"

A lot of parents can't get over this stumbling block, and as a result they don't have wills. And if something did happen to them and their kids needed a guardian, a judge would have no clue about who they would have wanted to take on the job.

The best advice I can give is to just name somebody--you can always change it later. But don't leave such an important decision up to a judge who doesn't know a thing about you or your family. Attorney (and mom) Liza Hanks has a great discussion of how to overcome common problems in her book The Busy Family's Guide to Estate Planning.

Mary Randolph

When you're putting together your estate plan, don't forget to pass on the login names and passwords to your online accounts. Loved ones may need access to them when you're gone.

If you bank online, use online stock brokers, or if you conduct other business online -- maybe through eBay or PayPal -- your loved ones or your executor will need to close those accounts and distribute any remaining funds. Leaving clear access will make that job much easier.

Your loved ones may also want to retrieve contacts from your email account, preserve photos from your online photo library, or post a final entry onto your blog.

Accessing online accounts without the password can prove difficult, if not impossible. In an article for the Wall Street Journal, Katherine Roseman reports that each internet site makes its own rules about providing a deceased's account information. For example, to access a Gmail account, Google requires proof of death and provides access only to an estate administrator, while facebook won't provide account access at all but will put the account in a "memorial state."

You don't need a fancy document to leave this information. Just make a list of important accounts and store it with your other estate planning documents. For more information, see Nolo's article Help Your Executor: Secured Places and Passwords.

Betsy Simmons

While some people may not be ready for an estate plan, others need one yesterday. And lots of us fall somewhere in between no need and urgent need.

Here are ten situations in which you need some kind of estate plan. They're listed in decreasing urgency from "you need an estate plan, now" to "you know, should really think about making an estate plan."

1. You have an untraditional family structure. For example, you and your partner aren't married or your partner is not your child's other legal parent. Make arrangements to protect your partner and your children, ASAP.


2. You do not want the bulk of your property to go to your closest relative. Write a will or trust.


3. You have a child with special needs who relies on government benefits. Set up a special needs trust to supplement income, without risking eligibility for government benefits.


4. You are close to the end of your life, either because of age or illness. Now is the time make your wishes known, with a health care directive and a will or trust.


5. You want to name a guardian who will care for your child if both you and the child's other parent cannot. Write a will.


6. You have a large estate (more than $2 million). Your estate will be subject to estate tax. Careful planning may allow your estate to avoid or delay paying that tax.


7. You have specific wishes about the health care you would receive if you become unable to make health care decisions for yourself. Make a health care directive to make your wishes known to your family and to your caregivers.


8. You want to determine what happens to your body after you die. Consider making final arrangements so that your love ones can honor your wishes.


9. You want certain items of your property to go to specific people. Write a will, otherwise your property will be distributed according to the laws of your state.


10. You're not rich, but you own a few high-value items. Consider writing a will to distribute your property.

Betsy Simmons

Most people know that it's a good idea to have an estate plan. But estate planning is rarely high on one's list of things to do, so what most people really want to know is at what point to you really have to make one? For some the need is more urgent than for others.

How badly you need an estate plan depends on a number of circumstances in your life. These include: your marital status, how much stuff you have, if you have kids or other dependents, and if you care about what medical care you receive if you're incapacitated.

You don't really need an estate plan at all if:

• you're youngish and healthy


• you don't have much property


• you're okay with how the state will distribute your property if you die with out a will


• you have no children, AND


• you're not concerned with what medical care you will receive if you're incapacitated or what will happen to your body when you die.

That said, there are some good reasons to make a will sooner than later. Check out my next blog post.

Betsy Simmons

If you die without an estate plan that distributes your property, your property will be distributed according to the laws of your state. Those "intestacy" laws give your property to your closest living relative. But who is that? Each state has come up with its own schema for determining the closest living relative. Much of the time, the laws might work the way you want them to. For example, all states give your estate to your spouse and children first. (The share that each child or spouse receives differs according to number of children and whether or not your spouse is your children's parent. This formula differs from state to state.) Under intestacy laws, more distant relatives, such as your cousins, would only get your estate if you had no other closer living relative. So that makes sense too. But sometimes your state's choice for "closest living relative" might not be the person you want to inherit your estate. For example, what if the state identifies your father as your closest relative, but you haven't had a relationship with him since you were a child? Or what if your closest living relative cannot be trusted with your property because of addiction or mental illness? In these situations, the person who would get your property is surely not the person you would choose to give it to. The bottom line is while intestacy laws will work as an acceptable fall back in some situations, it's best not to let your state decide who is your closest relative. You're better off coming up with your own plan. If you want to know more about the intestacy laws in your state, check out www.mystatewill.com. For legal geeks (like us) who love this stuff, the site even has intestacy calculators that tell you how your state will divide your property if you die without an estate plan. It will estimate your federal estate taxes too... pretty cool!

And, if you'd like to create your own custom estate plan, check out Nolo's bestselling Quicken WillMaker Plus.

Betsy Simmons