I had a meeting with my attorney last week on registering the new estate that we had purchased recently. When we were almost done with the formalities, our attorney casually asked us if we need help on making our will. “A Will? Now? We both are just touching our 30’s”, I said, of my husband and I. “So what?” asked my attorney with a quizzical expression. “You both have earned and saved some wealth isn’t it. And now you have a baby? Shouldn’t you do something to secure her future”?
That hit us right on our head. We immediately sat down to discuss the ‘how’ and ‘what’ of creating a will. Let me share some of the points that we discussed here.
1. Who should create a will?
Anybody with any decent asset to talk about, right from bank accounts, jewels, houses and estates to valuable antique stuff, expensive furniture etc can create a will to specify what would go to whom after the death of the owner. You may think that you are just in your 20’s and it’s too early to make a will. But life is uncertain and it’s wise not to leave anything to chance. Blogger of ‘Get Rich Slowly’ has this informative post on a brief guide to creating a will.
2. What happens if I die without creating a will?
This is called dying intestate. It depends on your marital status and whether or not you have issues. If you are married with children then the estate will be split with one half going to the surviving spouse and the rest split among the children. For those who are married without children one half would go to the surviving spouse and the rest to the surviving parent(s). If parents are dead it’d be shared between the siblings of the owner. For those who are single with children the entire wealth will be shared between the children. The property of those who are single without children will go to the parents if surviving or shared among siblings.
Since most of us may not be really happy with this kind of an arrangement and the way our wealth is split, it’s wise that we create a will to exactly state who gets what.
3. How do I ensure the effective execution of my will without any dispute?
For that you need a proper estate plan that exactly states all the assets, what goes to whom and also allocates resources for executing your will. Since a will can be contested in court of law, those with adequate assets are advised to create an estate plan also. Fellow blogger ‘Hill’s Personal Finance has this interesting post on the need for an estate plan.
4. Is there anything more important than drafting a will?
Yes. Updating the will is even more important to ensure that your property benefits those whom you want it to benefit. As years pass, things change, people change, some are born, some die, we change as individuals, we buy and sell property. So it’s wise to keep updating our will every few years to leave behind property that’s not caught in legal wrangles. Remember what happened when 28-year-old Heath Ledger died leaving nothing to his former girlfriend and their 2-year-old daughter when it was found that he left an obsolete will.
Filling long and endless forms when applying for a credit card or an insurance policy can be a very boring task. We may have moved on to online banking and online financial management, but paperwork still remains an important part of investment and financial planning. One careless step or wrong information might lead to a lot of trouble. Let me explain how.
I knew this person Jack Hawley (name changed to protect identity), a senior citizen with over $20,000 in an account with a popular bank. The account was started when Jack was young and he maintained the account for many years. While filling the form at the time of starting the bank account, the relatively young Jack overlooked the ‘Nominee’ column. Years later, after his death, his wife an equally old Stacy approached the bank to withdraw the sum in her husband’s account. But she was not allowed to do so since her name did not appear as the nominee for the account. She did get a reprieve finally and the bank allowed her to retrieve the amount, but only after much running around, paper work and other formalities to prove that she was indeed Jack’s wife and a legitimate recipient of the amount.
Many financial advisors I speak to say that while not revealing details cause trouble, in some cases concealing information may also lead to problems. Like in the case of another acquaintance, Steve who had applied for a medical insurance policy. In his hurry to finish the formalities, Steve left the task of filling the form to his insurance agent, who hastily gathered information from Steve and placed tick marks across the ‘No’ option for the list of all diseases in the form, including diabetes which he suffered from. Months later, when Steve hurt his large toe and a surgery had to be done to amputate the toe; it was revealed that he was suffering from diabetes for a while. The insurance company rejected the claim on the ground that the ailment was concealed.
DIfferences in ones name or signature properly may also cause problems. Nicholas’ grandfather in his will had bequeathed his large mansion to his grandson. What his grandfather did not know was that his grandson Nicholas had shortened his name to Nick and has been using the same for all transactions. It required a lot of effort and running around for Nick to prove that Nicholas and Nick are one and the same.
While insuring gold, diamonds and other valuables for theft, it is important to know the exact weight of the jewels, experts in the insurance business say. Stating just the value of the goods insured does not help much during claim settlement. It is advisable to retain the original invoice of the valuables that will be of great help to settle claims in case of theft or damage by fire.
A little more attention to detail while making a financial transaction will go a long way in making life easy. Let not a small mistake erode a lifetime’s earnings.
One of my many New Year resolutions has been to write down my daily expenses. The effort which I grudgingly took up has been a sort of enlightenment for me in that, I have realized that fuel expenses have started becoming one of the largest expenses for me every month, apart from food. In fact it has constituted almost one-third of my total expenses till date this month. This has made me more determined than before to reduce my gas bills. I read up a bit on the ways and tips to keep a check on and reduce fuel bills. I have been sharing those tips with my friends now. Here are some of them.
1. Driving the car at moderate speed to save fuel. Steering the car at over 70mph will only lead to an aerodynamic drag resulting in increased fuel consumption. Contrary to popular myth, keeping the air conditioner on while driving does not actually increase fuel consumption. In fact keeping the windows open while driving at high speeds only increases fuel consumption. Driving at lower speeds also consumes a lot of fuel. So moderation is the way to be.
2. Switch off the ignition if you know for sure that you are going to wait for more than a minute. It consumes less fuel to restart the engine than to keep the engine running idle for a long time during traffic jams, or while doing some quick shopping.
3. Service the car regularly to check the battery, spark plugs and tyre pressure. A well maintained car with clean air filters and the right tyre pressure always gives better mileage than the ones that rarely visit the garage.
4. What car you own, plays a big role in how much you spend on fuel. If you are yet to buy a car you can check out some of the latest hatchbacks in town. Small cars are known to be much more fuel efficient than large gas guzzling sedans. Beginners will find it much easy to park and handle hatchbacks as compared to sedans. Browse through car review sites to find the more fuel efficient models.
5. Do not hesitate to form car pools with those traveling to your college or office. Using messengers or community sites you can find out the list of those people who travel through the same route at the same time and form car pools. It is not shameful to form car pools and save fuel, certainly not when you have a look at your fuel bills at the end of the month.
6. Websites like www.fueleconomy.gov provide the list of locations where gas prices are lower compared to other places. You can check such sites by location, before filling the fuel tank.
7. Trying to fit into those slim fit jeans for a long time now? Drop those car keys at home and take a walk. You not only save fuel but will also end up shedding the extra flab which you have wanted to lose for a long time.
Back to blogging after a really long holiday break. Christmas was fabulous with an extended family reunion, exotic food, few good and few not so great gifts. The best gift surely was the pair of Prada sunglasses that my hubby gifted. New year eve was one helluva party night that extended well beyond the day.
We are well into 2009 with our waistlines up by a few inches and wallet lighter by a few hundred dollars. We badly want to reverse the status of the two now. So here we go with our cost saving and waist(e) reduction plan for 2009.
First look at the household expenses since these usually form the largest part of our monthly spending. Grocery is one huge expense. I obviously can’t stop eating. But I sure can resist getting tempted by those yummy looking cookies, tarts and cheese dips attractively displayed in the stores. They sure know how to seduce people like me.
Having a shopping list in hand and trying to stick to it, while going out for shopping should help. This should help me have a watch on my waistline (hope I also try and fit into jeans one size smaller, something i’ve been trying for years now). Comparing prices in 2 or 3 stores to see who offers the best deal should also help; since stores usually offer good deals at the end of the month to clear stocks. Eating out is a sure no-no for the next few weeks atleast. Whether to work or travel, packed lunches are my best friend, now on.
The next big money sucker is my power bills. If the air conditioner or room heater is switched on all through the year then there is no choice but to foot hefty power bills. I read somewhere that when using room heaters or coolers, the room has to be properly insulated. Otherwise all the cool air might just slip through the small gaps in the window and door frames. So my important task this weekend would be to check my entire house for leakage.
Also, when using a PC, most of the power is used up by the monitor. So I guess when I’m not using my PC for more than half an hour or using it just to listen to music, it makes sense to switch off the monitor. The yellow heat generating incandescent bulbs generate 70% more heat and use up 75% more energy than compact fluorescent lamps (CFL). So there goes another weekend task of mine. Changing my conventional bulbs with a CFL. This way, I also do my own small bit in saving the environment. Small little things like switching off the lights and other power utilities when not in use, leaving the windows open during summers to let the sunlight through should also help.
When discussing fuel bills one of my colleagues suggested filling gas in the car early in the mornings as much as possible. As the day progresses, with the increase in heat, the gas stored below the earth in the gas stations would be in a vaporized form during the day, which would mean a lot of vapor will also go into my fuel instead of gas. By filling it in the mornings the vehicle will be able to absorb almost all the gas that I pay for.
Weekend entertainment is also a huge part of the monthly expense. Instead of cutting down on entertainment, maybe I should reschedule it. Most movie halls, multiplexes, fine dining restaurants and entertainment parks charge heavily during the weekends. Let me try rescheduling my weekly entertainment to a movie on Wednesday nights or a nice dinner on Thursday nights. This way I pay less for almost the same service, avoid the weekend crowds and also beat the mid-week blues away.
So that is largely my plan for 2009. Will keep posting on the progress.
