The funnel to a successful estate plan

It’s an unfortunate reality that very few people end up with a perfectly executed estate plan. In an ideal world we would see every person’s assets being passed to the next generation in a way that represents their wishes, in reality there are a number of key steps to this process and consequently too many points of failure. This post will explore those steps and what we are doing at LegalWills to try and improve the numbers;

1. 65% of people don’t write their Will

This is of course the most significant leak in the funnel. The vast majority of people never create a Will because it is too expensive or inconvenient. As a result, people procrastinate thinking that they can get to it some time next year. Alternatively they wait until there is stability in their life because they think that the writing of a Will is something that they only want to do once in their life. We often hear from people who say “I will be getting married next Summer, should I hold off writing a Will until then?”. On the one hand, it is true that getting married will invalidate the Will in most jurisdictions, but there is never a time that a person should be without a Will. So we recommend that the Will is written today, updated when the person gets married, and updated every time they experience another major life event. Which brings us to the second issue – Funnel

2. Most Wills are not kept up to date

When a person visits a lawyer to prepare their Will, they can pay a significant amount of money and with that, they would expect the document to last quite some time, if not a lifetime. The reality of course is that the document can be out of date by the time the person gets home. There are many high profile examples of Wills not being updated with dire consequences; new children not being included, new partners, Executors who are no longer fit to serve. In fact, most celebrity Will disputes are caused by a Will not being updated to reflect new circumstances. A Will should not only be updated when there are changes in personal circumstances, but also when a life event happens to anybody named in the Will. It may be that the personal guardians for your children have moved across the country, had triplets of their own or for whatever reason are simply no longer the best choice. Many times we hear from people who explain that “I do have a Will but it was written twenty years ago, before we had children”, in which case, although they are one of the 35% with a Will, it is all but useless.

3. Many Wills are never found

The single most common question we receive at LegalWills for non-customers is “my father had a Will, but we don’t know where it is, how can we find it?” and the short answer is, you can’t. It doesn’t matter whether the Will is stored at home, or with a lawyer’s office, if the family and loved ones are not told where the Will is located, they have very little chance of finding it. We also hear from customers who aren’t sure how to revoke an old Will and explain that “I had a Will written 15 years ago with a lawyer, but I was living in a different city then, I’m not even sure that the lawyer is still there, how do I cancel this Will”. In this situation the testator can’t even find their Will, so there is no chance of a family being able to find it. So although this person is technically one of the 35% with a Will, it hasn’t been updated and it has no chance of being found.

4. The Executor has no idea how many assets there are

We are now left with less than 10% of the population; they have written their Will, they updated it regularly to reflect changes in their circumstances, their family and loved ones are able to find the Will when they need it, but now the Executor will have to find the assets. But there is no list of assets kept with the Will; so infrequently used bank accounts, online assets, dormant savings accounts, stock purchases, or even cash under the floorboards will never be found and never make their way to the beneficiaries. It is never a good idea to include a complete list of assets in the Will itself; they change frequently and you wouldn’t want to have to update the document every time a new account is opened, but the Executor needs to know when their job is complete.

At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we have tried to solve these issues. Firstly, we created a service that allows you to write your legal Will for $34.95 or £24.95 from the comfort of your home. We then allow you to update the document by simply logging into your account, making the change, and printing a new document. We then allow you to create messages that can be distributed to key people after you have passed away, and this can include instructions for locating your Will. Finally we have teamed up with My Life Locker™; the Ultimate Life Organizational System. Using this service you are able to maintain a file of your personal assets which can then be accessed by designated keyholders™ only at the appropriate time. This ensures that all of your assets make their way to your beneficiaries.

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The broken system of the Last Will and Testament

morse

Samuel Morse invents the telegraph and the UK Wills Act was written

We live in a wonderful age of smartphones, social media, biometrics, geolocation and even “smart clothing”. There is however one industry that seems to have dodged the world of technology – the system of writing a Last Will and Testament hasn’t changed much in centuries. In fact, the law pertaining to Wills in the UK was written in 1837, the year that Samuel Morse invented the telegraph, and aside from a few minor updates, the law has not really changed very much. Today, there are at least three major issues with our system of writing a Will;

1. Most people don’t have one

Everybody should have a Will, but most people don’t have one, and for those that do, most are not kept up-to-date. This is a serious issue as people end up dying intestate and their estate is not distributed according to their wishes, or worse, their wealth goes to the government. There are a number of reasons for this;  general procrastination and cost are most frequently cited. In most cases though, it comes down to the misconception that the only people who can write Wills are legal professionals. This is of course not true, anybody can write their own Will, but the legal profession continually scaremongers the general public by making weak analogies (“you wouldn’t perform your own brain surgery, so why would you write your own Will?”) or making it sound more difficult than it actually is “use a lawyer because you have to sign it correctly or it is invalid” (you have to sign the document in the presence of two witnesses….most people can understand this instruction). But the best method for making the process seemingly beyond the understanding of the general public is persisting in using the language of Chaucer and Shakespeare. Wills are still filled with terms like “hereinafter”, “thereof”, “hereunder” and 250 word sentences (I counted an actual sentence in my Will). There is absolutely no justifiable reason for forcing a document written in 2013 to be totally unreadable. There is also no legal requirement to use impenetrable prose to write a Will.

2. Finding the Will

The most frequent call we receive at LegalWills is from a loved one who thinks their family member had a Will, but they can’t find it. There is no registry of Wills, and if there were, most people wouldn’t use them. There is also no way of knowing whether a Will that has been found is the latest version. It is a system that should not exist in the advanced technology age that we are living. The only legal Will is a printed piece of paper with a scrawled signature. Electronic Wills are not legal, nor video Wills, nor digital signatures on Wills. If a person dies in a house fire, chances are their Will went with them. Everybody who dies from a natural disaster will probably be deemed to have died intestate as their Will went with the tornado…flood…tsunami. And don’t assume that writing a Will with a lawyer is any help, we often hear “my father died in Vancouver, he wrote a Will with a lawyer, but we don’t know which one, but I think he wrote it about 25 years ago”. It is a hopeless situation.

3. Collecting the Assets

Assuming that a Will has been written (point 1) and the Will has been found (point 2), the Will probably says something like “I leave my entire estate to …” . The Executor then has to start gathering up these assets; the life insurance policies, bank accounts, government bonds, share certificates, cash, online accounts. The problem is, the Executor has absolutely no way of knowing when they are done. We wrote about this in a previous article when Citibank put out a 16 page supplement to the New York Times with a list of thousands of old accounts asking for people to claim them. There are some tools available to help, like www.mylifelocker.com. But again, it’s a problem that shouldn’t exist in 2013.

At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we are trying to help with each of these issues, and I will describe in more detail in future blog posts. But it is infuriating at a time when I can buy a pair of socks with smart sensors and an accompanying iPhone app that the Wills business seems to have been frozen for 200 years.

The challenge of keeping your Last Will and Testament safe

We seem to have touched on this topic a few times in this blog; how do you keep your Last Will and Testament safe and private, but accessible to your Executor at the appropriate time? It is a real balancing act that weighs up security, with the convenience of access for the Executor as well as the ease of updating and maintaining the document.

a lost Will in Tuscaloosa

In the last few days and weeks the issue has become more prominent after the tsunami in Japan, the tornadoes in the US and the series of earthquakes in Asia. I read today of a Facebook group dedicated to “Pictures and Documents found after the April 27, 2011 Tornadoes” with the hope of reuniting important documents with their owners, and these documents include property deeds and a number of Last Will and Testaments.

We actually received calls from relatives of people impacted by Hurricane Katrina in 2005 asking how they would attempt to locate a person’s Will after this type of disaster. And really there is no good answer that can be given.

Your options currently are to store your Will at home, maybe in a fireproof safe, or to store the document at a lawyer’s office or with a bank. Each option has its advantages and disadvantages, but in a catastrophic situation, none of these options is likely to help. We wrote previously about the proliferation of Will registries and how ineffective these services are, as they most often allow you to store a note with a description of where the document is stored, not the document itself (we actually feel that many of these services are close to being scams).

Storing your document at home is the best way to ensure that your Executor can access the document at the appropriate time; however, there doesn’t necessarily have to be a natural disaster for you to lose your document; a flood or house fire may put your Last Will and Testament at risk. Storing your document in a lawyer’s office probably makes the Will more secure and often documents are stored offsite; however, a lawyer’s office is as likely to fall victim to a tornado as much as a home, so it is worth asking the lawyer’s office exactly where the documents will be held. One cautionary note though is that your Executor needs to know where the document is stored, and it is not uncommon for law offices to merge and be acquired by other offices and so your Will could potentially outlive your law firm (it actually happened with my family).

Tuscaloosa, Alabama

Minamisanriku, Japan

The bank is the most secure, but your Executor faces a conundrum; how can they gain access to the deposit box, when the document that can provide them with the authorization sits in the deposit box. It is actually the least convenient of all options, and again, your Executor would have to know how to gain access at the appropriate time.

A quick word on copies. One seemingly obvious way of protecting your documents is to make a number of copies and store them in all kinds of different places. This unfortunately doesn’t work – there should only ever be one original document; copies should be clearly marked as copies. Every time a Will is updated, previous versions including all copies, should ideally be destroyed, but even if this isn’t done, a newly signed and dated Will effectively cancels (revokes) any previous Wills.

Unfortunately until the law manages to catch up with digital signatures, cloud computing, data encryption and all of the other technologies available to us today, a signed piece of paper is the only legal form of a Last Will and Testament, and as we know, pieces of paper don’t do very well in floods, winds, fires and exposure to countless other natural elements …. !

Registering your Last Will and Testament: what’s the point?

One of the most frequent questions we receive at LegalWills is “do I have to register my Last Will and Testament somewhere in order for it to be official?” The short answer is of course, no, but we’ll spend a little time today delving into what it means to register a Will.

First, a point of clarification. We are speaking purely of registering your Will while you are alive, not the registration of a Will that happens once you have passed away, after your Will has been probated and read.

The act of registering a Will while you are alive is an attempt to overcome the problem of people not being able to find a Will when they need it. We wrote about this in a previous blog posting, and we’ve seen stats claiming that 67% of people do not know where to find their parents’ Will. It is vital that the right people can find your Will at the right time, and this is where the concept of registering the Will comes in, but in our opinion it’s a highly ineffective way of attempting to solve the problem.

No country has an official central Will registry, but let’s look at a few approaches taken by different jurisdictions that allow for the registering of a Will.

In British Columbia, you can register the location of your Will with the provincial department of vital statistics. For about $18 you can file a notice that ” identifies that a will has been registered and describes the person who has made the will, where the will is located, and the date of the will.” You cannot register the Will itself, but you can say “I have a Will and it’s at home in my bedside table”. Once you have passed away, your loved ones can contact the vital statistics department, pay $20, submit a death certificate and request a search.

In the UK it has been left to private enterprises to offer the same kind of service. Certainty.co.uk appears to be the market leader in allowing you to register the location of your Will, but again, it’s not the Will itself, but a pointer to the location of the Will, whether that be with a solicitor or a location at home. For this, the charge is £30. (although searching for the registered Will costs anything from £25 to £235!!).  However, Willdata.info also claim to be the UK National Wills registry and it never helps to have more than one national registry!! (WillData incidentally is free to register a Will, and £18.50 to search)

Some States in the US have tried to do a little more. For example, in Alaska, you can deposit a Will for safekeeping with the courts. The service is described as follows

“If you deposit your will with the court, it will be kept in a secure place, and the will is kept confidential by the court until you die. After you die, your will is no longer confidential and it becomes a public court record. Also, even though your will itself is confidential while you are living, the fact that you deposited your will for safekeeping is not confidential, and others may search electronically for the names of  people who have deposited wills.”

The fee for this service is $40. But the service comes with this reminder “It is your responsibility to be sure the designated person(s) know that upon your death they must contact the court and request your will.”

There is definitely a real issue with Wills not being located when they are needed, but the registration process seems to be a very poor effort at solving that problem. I would hazard a guess that less than 1 percent of Wills are registered, and in reality, hardly anybody has even heard of these registries. The idea of paying $20-$50 to store centrally the piece of information that states that your Will is stored at home in a cookie jar seems ridiculous, and in some cases it is little more than opportunism by private corporations.

The bottom line is that there is no requirement to register your Will centrally to make it legal and in our opinion, there is very little value in doing this. We do have a service at LegalWills that allows you to create messages for loved ones to be distributed after you have passed away, and this would seem to be as effective as any of these Will registries. We try to reinforce the practice of regularly reviewing and updating your Will so storing the document itself with a government agency would seem to be counterproductive.

By far the most effective approach is just to tell your Executor where your Will is located. You will be trusting your Executor to distribute your assets according to your wishes, and they should be told ahead of time that they have been selected for this role. So you should have enough faith in this person to let them know where your Will is stored. This should guarantee that the document will be available to the right people at the appropriate time.