Do I Need Life Insurance?
If you are single with no dependent children, you probably don’t need life insurance. Similarly, if you are married with no dependent children and your surviving spouse would be able to pay expenses, there are probably better ways to invest your money. However, you should consider buying life insurance if you have dependent children, your spouse does not work, or if you own a business.

What Type of Insurance Should I Purchase?
Life insurance is typically divided into two major categories – term and permanent (aka cash value).

Term life insurance is the simplest and least expensive type of policy, typically costing just a few hundred dollars per year. This type of policy lasts for a set period of time (e.g. 20 or 30 years), and is a good option for people who want insurance until their children are grown or until they reach retirement.

Permanent or cash value life insurance is a more expensive option, both because its duration is typically longer (until the end of your life), and because it includes an investment component. With a cash value life insurance policy, money accumulated in a tax-free account can be used to pay future estate taxes. Also, beneficiaries are not required to pay income tax when they receive a payout from the policy. Although this type of plan can be beneficial for some people, it is important to weigh the costs and benefits. Investing additional money in a 401k can sometimes be a better option, allowing you to avoid the higher premiums and relatively limited investment options associated with a permanent life insurance policy.

How Much Coverage Do I Need?
The appropriate coverage amount depends on the length of the policy, your assets and expenses, and your current and projected income. You should also consider any special circumstances, such as the need to pay for a child’s future college tuition or ongoing expenses for a special needs relative. Your broker or insurance company can help you plan your coverage amount and answer questions about your particular circumstances.

How Do I Buy Life Insurance?
Once you decide on the type and amount of coverage you need, purchasing life insurance is a relatively quick and simple process. You can purchase life insurance directly through an insurance company or use a broker if you’re more comfortable doing so.

Life insurance may be purchased in person or online, and each has benefits. Shopping online allows you to research different types of plans and compare rates between companies. If you decide to work directly with a broker or specific company, someone will likely be available to explain your options and answer specific questions.

Also, some employers offer group life insurance plans. Group plans are beneficial for individuals with pre-existing medical conditions or health problems, because a medical evaluation typically is not required. In contrast, most individual plans require a basic medical evaluation. The insurer will usually arrange and pay for this evaluation.

For more information about estate planning (including a helpful Estate Planning Checklist) or to create a free, online Will, visit doyourownwill.com.

You should consider developing (and periodically updating) a list of important accounts and services with their corresponding access information. You may want to include the following items on your list:

• Computer login and password
• Email login and password
• Online banking login and password
• Debit card PIN
• Passwords for cellular phones and other electronics
• Location and access information for physical documents and items (e.g. safes and safe deposit boxes)

You can provide this information to your Executor in a Letter of Instruction, which should ideally be stored in a safe at your home. Do not use a bank safe deposit box to store this letter or other documents that need to be accessed quickly, as it likely will not be able to be opened until after your Will has been read and implemented.

Although there are also password-storing services available online, storing a physical document in a safe in your home is probably the simplest method. Just be sure your spouse, Will Executor, or attorney has the code needed to access this Letter of Instruction.

See Do Your Own Will’s Estate Planning Checklist for additional estate planning considerations.

Sinatra was married four times throughout his life – to Nancy Barbato, Ava Gardner, Mia Farrow and ultimately Barbara Sinatra at the time of his death. He had three children (Nancy, Francis and Christina) with his first wife, Nancy. Despite having a large estate, multiple children, and multiple marriages, Sinatra’s Will is relatively simple.

The Will names two co-executors and outlines very specific rights and duties for these individuals. The bulk of the Will describes specific bequests, mainly to his wife Barbara and his children. Like most individuals, Sinatra chose to leave the bulk of his estate (minus specific bequests) to his wife.

To read the full text of Frank Sinatra’s Will or the Wills of other famous people throughout history, visit doyourownwill.com’s Famous Wills page. When you’re ready to begin drafting your own Will, simply click Do Your Own Will to get started with the free, simple process!

If you’re interested in learning more about writing a Will before beginning the process, Doyourownwill.com has additional information available, including:

• Why Do I Need a Will?
• Can I Do My Own Will?
• Will Requirements
• Additional Legal Information

When you’re ready to begin writing your Will, simply click on Do Your Own Will to get started with the simple process!

Unlike a typical (non-durable) power of attorney, the agent retains authority to make decisions on behalf of the principal until the principal’s death, regardless of health or mental state.

As with all power of attorney documents, a durable power of attorney may be general or special/limited. A general durable power of attorney allows your agent to conduct all acts that may legally be done by you, while a limited durable power of attorney covers specific actions, such as making health care decisions or selling property. See the DYOW blog post General vs. Special POA for more information on this topic.

Also visit doyourownwill.com’s Power of Attorney page for additional information or to download the appropriate forms for granting a general or special POA.

You can use DoYourOwnWill.com to update your Will if it was completed on our site or elsewhere. Because no information is saved or collected on DoYourOwnWill.com, it is not possible to search for Wills previously completed on the site. To protect your privacy, the document is not saved on the website, and any information you entered will be cleared/lost after closing the browser window. However, the process of entering your new information into the site’s guided form is quick and simple.

After completing a simple questionnaire asking for your name and address, Executor designation, and how you’d like to distribute your estate, the site automatically inputs your information into a standard Will document. You can save the new document to your computer in editable text or PDF format.

Visit DoYourOwnWill.com to get started with your free, online Will today!

Most people don’t realize that planning and preparing a will can be quite simple. DoYourOwnWill uses a guided, step-by-step process resulting in a legally valid will you can save to your computer in a PDF or editable format.

DoYourOwnWill provides all the information you’ll need to feel well-informed and comfortable writing your own will online. Before beginning the process of drafting your will, it is helpful to understand some of the benefits, components, and requirements of will-writing (also see the DYOW blog post on The Benefits of Writing a Will).

When you’re ready to begin writing your will, simply click on Do Your Own Will to get started with the simple process!

General Power of Attorney
A General Power of Attorney gives your agent the authority to handle all your affairs during a period of time when you are unable to do so, such as when you are traveling out of the country or when your physical and/or mental health are compromised. A General POA can be included as part of your estate plan to ensure that your financial affairs will be tended to in the event that you are unable to do so.

A General Power of Attorney is typically very broad, giving the agent extensive powers and responsibilities. Powers typically include (but are not limited to):

• Handling banking and other transactions
• Filing tax returns
• Buying, selling, or managing real estate and other property
• Entering contracts
• Settling claims

You also have the option to grant your agent additional powers, such as making transfers to living trusts, maintaining and operating business interests, and disclaiming interests, among others.

Special, Specific or Limited Power of Attorney
A Special, Specific or Limited Power of Attorney gives your agent the authority to conduct a specific act or acts on your behalf. Because this type of Power of Attorney is limited to the act or acts designated in the document, it is especially important to be very clear about the powers you wish to appoint to your agent.

You may use a Special Power of Attorney to appoint an agent to act on your behalf in the event that you become ill or disabled, are embarking on extended travel, or are otherwise unable to handle a specific type of task. You may designate any of the powers listed above (under General POA) to your agent, or any other powers you deem necessary.

In addition to the information provided in the other POA blog posts (I – VII), DoYourOwnWill.com has more information available on their Power of Attorney page, including free general and special power of attorney forms.

Most people don’t realize that planning and preparing a Will can be quite simple. If you’re interested in creating your last will and testament online, DoYourOwnWill.com offers a free service. The site uses a guided, step-by-step process resulting in a legally valid Will you can save to your computer in a PDF or editable format.

Before beginning this process, it is helpful to understand the components of a Will. Generally, a Will includes the following information:

• Your name and place of residence
• A description of your assets
• Names of spouse, children and other beneficiaries
• Alternate beneficiaries, in the event a beneficiary dies before you do
• Specific gifts
• Name of an executor
• Name of a guardian for minor children
• Name of an alternative guardian, in the event your first choice is unable or unwilling to act
• Your signature
• Witnesses’ signatures

See DoYourOwnWill’s page on Will Requirements or read about the other topics in the left menu for more information. When you’re ready to begin writing your Will, simply click on Do Your Own Will to get started with the simple process!

Federal Estate Tax
Steve Jobs’ reported net worth was about $7 billion, including significant share-holdings and real estate.  The federal estate tax is currently 35% but is scheduled to increase to 50% in 2013.  This means the government could receive up to $2.5 billion in taxes from Jobs’ estate. However, the first $5 million of an estate is exempt from federal estate taxes, and certain components of the estate are tax-exempt (e.g. charitable donations, funeral expenses, debts and certain types of property left to one’s spouse). These exemptions and inheritance designations can significantly reduce the amount of taxes paid on your estate.

Living Trusts: Asset Distribution and Privacy
A Living Trust is an estate-planning tool used to manage asset distribution after your death. When you establish a living trust, you transfer ownership of specific assets into the trust. While you are alive, you are both the trustee and the beneficiary, meaning you both manage and have access to the assets in the trust. After your death, the assets in the trust are distributed to designated beneficiaries (e.g. your spouse and/or children).

With his health declining due to pancreatic cancer, Steve Jobs and his wife transferred ownership of three pieces of real estate into two trusts early in 2009. Unlike a last will and testament, the details of a trust remain private after you die. Wills typically must pass through probate court and are therefore public record, while trusts remain out of the public eye (as long as there are no lawsuits or other problems).

Jobs may have taken additional steps to maintain privacy, namely by keeping other assets out of the court-supervised probate process. Naming children as beneficiaries to certain assets and establishing joint ownership (e.g. with a spouse) ensures that these assets will pass directly without entering probate.

Estate planning is beneficial even if your estate is much more modest than Jobs’.  Visit DoYourOwnWill.com for more information about living trusts and general estate planning.