CHAPTER What's With the Will? (1/4) 9 Procedure ... Activity: Group discus- Hand out the activity Carefully go through the terms, as they will be a key to sion and individual activity filling out the activity Encourage the kids to get in to small groups to complete the 45 MINUTES activity Have them share their thoughts about who they feel are qualified people to Materials. Activity handout act on their wishes and access to the internet If you have access to a sample will, you may wish to go through the details of that Objective. The purpose of with the class. Since wills are state-specific, look for one that is applicable to your this activity is for students to become familiar with particular state. the terms and procedures applied in creating a sim- Discussion Topics ple will and understand the overall importance of estate planning >> In the "Estate Plan" section, explain the problems that occur when a person dies STANDARD Planning and without a will (legal procedures, probate issues, delays, etc ). Money Management Standard 7: Examine the > Go over the terms associated with estate planning. These will be new terms for purpose and importance your students. Be sure to use them often during discussion. You may also want to of a with have students do an activity in which they practice using the new terminology . Identify the individuals and/or charitable > Discuss issues associated with estate planning (1 e , sense of entitlement; organizations that are children's needs, especially children with special needs; grandchildren; potential beneficiaries of personal property distribution of inheritance, etc) Explain how the law in the state of residence > Using the information provided, explain the purpose of estate-planning specifies the disposition documents (will, medical directives, living trust, durable power of attorney). of an estate when there Is no valid will . Explain the purpose and Answer Key importance of a living will (durable power of All answers are provided in the following text. Please be sure to read through attorney for health care) the information with your students. This activity is intended to supplement the Describe the compo- nents of a simple will interactive textbook content and provide a deeper investigation into the legal and research the cost of terminology, purpose and nature of estate planning. having one draftedimportance of a living will (durable power of All answers are provided in the following text. Please be sure to read through attorney for health carel the information with your students. This activity is intended to supplement the . Describe the compo- nents of a simple will interactive textbook content and provide a deeper investigation into the legal and research the cost of terminology, purpose and nature of estate planning. having one drafted What's With the Will? . ... Dave insists that, after age 18, everyone should have a will in place No one knows when their life will come to an end, but having a will allows them to speak after they're gone You're a teenager. Why should you care about a will now? By age 18, you'll need to know how to create a will. The truth is you have no idea when you'll pass away It's not pleasant to think about, but it's important to be ready. You'll have valuable items that will be left behind, and you do not want the state deciding where your money or belongings should go A will includes your final wishes for your family and friends, so take your responsibility seriously. You should identify people in your life who will receive these valuables or assets. Do not rely on the state to distribute your wealth. What do all of these terms mean? Foundations in Personal Finance High School EditionCHAPTER What's With the Will? (2/4) You need to know a few key terms to create a will Once you understand these words, the process becomes easier Estate Plan This is the plan that manages your wealth while you're alive and distributes your wealth after you die When you turn 18, you have two options Do nothing About 70% of Americans have no plan at all. Dying intestate (or without a will) is NOT recommended' The fact is If you are 18 or older, you already have an estate plan. It was written on your behalf by the legislatures of the state in which you live. If you die intestate, these laws govern who will inherit your assets At age 18, you should create a simple will. This is a written plan of how your property is to be distributed when you die The following activity is a simple will Once you are older, the terms of your estate planning will be a bit more complex You will have more assets and may also have a spouse and children to consider These are some important documents you'll need to be familiar with and the purpose of each. Durable power of attorney: A written document whereby you authorize someone to act on your behalf (particularly in the case of a disability) 2 Living trust: A trust is an arrangement in which one or more people manage or take care of property for someone else's benefit. A living trust is a trust that is created while you are still alive You transfer title to your property from your name to that of the trustee of the living trust 3 Medical directives: A medical directive allows you to express which treatments you want if you are dying or permanently unconscious. You can accept or refuse medical care. You might also include instructions on. > The use of dialysis and breathing machines * If you want to be resuscitated if your breathing or heartbeat stops Tube feeding2 Living trust: A trust is an arrangement in which one or more people manage or take care of property for someone else's benefit. A living trust is a trust that is created while you are still alive You transfer title to your property from your name to that of the trustee of the living trust 3 Medical directives: A medical directive allows you to express which treatments you want if you are dying or permanently unconscious. You can accept or refuse medical care. You might also include instructions on. > The use of dialysis and breathing machines * If you want to be resuscitated if your breathing or heartbeat stops *> Tube feeding >> Organ or tissue donation Terms and Definitions 1 Testator: (You) The person for whom the will is created 2 Beneficiaries: The people or organizations (such as charities) who are given shares of your assets 3 Joint tenants: The people who are given joint-ownership of your property 4 Executor: A male adult who executes the desires stated in your will Executrix: A female adult who executes the desires stated in your will Foundations in Personal Finance High School EditionCHAPTER What's With the Will? 9 (3/4) 5 Guardians: The people who can act on your behalf in the event that you are unable to make your own decisions or unable to carry out errands for yourself Probate: The court process by which a will is proved valid or invalid; the legal process in which the estate of the deceased is administered 7 Will: A legally enforceable declaration of how a person wishes his or her property to be distributed after death What Should I Know About Creating a Will? A will includes your final wishes for your family and friends, so take your responsibility seriously Listed below are some guidelines for your will. About Wills 1 In most states your will must be signed, witnessed and notarized to be legal. The witnesses must watch you sign and then sign the document too 2 Your will has no effect until you die Therefore it may be rewritten as often as you'd like. Each version negates the previous version. If two or more wills exist at the time of death, the most recent one applies 3 When choosing an Executor/Executrix: . You can choose almost anyone Most wills are fairly straightforward No legal or financial knowledge is required The most common executors are spouses, siblings or children . Spouses usually serve on each other's behalf . Name an alternate in case your first choice is unable to execute your will For example, a successor (an adult child or one of your friends) can fill the position as well . He or she should be a reliable, trustworthy adult who will work well with surviving spouses and /or childrenIn most states your will must be signed, witnessed and notarized to be legal. The witnesses must watch you sign and then sign the document too 2 Your will has no effect until you die Therefore it may be rewritten as often as you'd like. Each version negates the previous version. If two or more wills exist at the time of death, the most recent one applies 3 When choosing an Executor/Executrix: . You can choose almost anyone Most wills are fairly straightforward No legal or financial knowledge is required The most common executors are spouses, siblings or children . Spouses usually serve on each other's behalf . Name an alternate in case your first choice is unable to execute your will For example, a successor (an adult child or one of your friends) can fill the position as well . He or she should be a reliable, trustworthy adult who will work well with surviving spouses and /or children . Secure the executor's agreement in advance and discuss the details of the will When choosing Guardians: . Identify guardians for children under the age of 18. . Select people with similar values as yours. Secure the guardians' agreement in advance . List alternative guardians . Be specific about the guardians' powers Foundations in Personal Finance High School EditionCHAPTER What's With the Will? (4/4) 9 When choosing a Power of Attorney: . Select someone you trust, such as a family member or friend You are giving them the power to make decisions on your behalf . They must follow your directions, and they cannot use your assets for themselves (unless you tell them to) Their responsibilities may include spending your money on your behalf, selling your property, entering into contracts, and pursuing your legal claims There Will Be Taxes *> When planning an estate, you will want to explore ways to reduce tax burdens of beneficiaries Consult a professional to find out how the laws affect your situation > If you are a beneficiary of a loved one's estate, you will also need to file a final income tax return to comply with tax laws that ensure taxes on your loved-one's income, before his or her death, don't go uncollected That responsibility falls to the executor of the estate or, if there is not an executor, a family member. The tax return is filled out the same way as if he or she was still alive, but "deceased" is written after the taxpayer's name Final Thoughts > Write a list of valuable and sentimental items, along with the names of those who you want to inherit them. Attach this list to the will. > Clearly state burial and organ donation instructions " Keep the will, along with copies of other important financial records (i.e., insurance policies, investments, bank records, etc ) in a secure location Put an extra copy in an easily accessible place where your loved ones can find it.My Simple Will Directions Please answer the questions below. Assume you are 40 years old, married, and you have three kids ages 16, 13, and 8 Executor/Executrix: Who are two people you consider to be good executors for your estate? Explain why they fill that role well Name of Executor/Executrix Reason for Selection A 3 Guardians: Who will serve as guardians for your children? Explain why these people would serve this role well Name of Guardian/Guardians Reason for Selection A 3 Who will serve as your Power of Attorney? List reasons why. 4 Do you wish to be an organ donor? What are your burial preferences? 6 Where can you go to have your will notarized and made legal?Name of Guardian/Guardians Reason for Selection A 3 Who will serve as your Power of Attorney? List reasons why. 4 Do you wish to be an organ donor? 5 What are your burial preferences? 6 Where can you go to have your will notarized and made legal? Identify the individuals and /or charitable organizations that are beneficiaries of personal property. Go online and research the minimum costs and procedures for drafting a simple will in your state CHAPTER 9 Foundations in Personal Finance High School Edition