Personal Finance 1st Edition by Jack R. Kapoor

Exercise 16

1 Distinguish among the four types of wills.

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2 What are the two formats of wills?

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3 What are the steps in writing your will?

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4 What is an ethical will?

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5 What is a power of attorney?

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6 What is a letter of last instruction?

Action Application Draft your simple will, using Exhibit 19-1 as a guideline. Whom will you appoint as a trustee or guardian for your minor children? Why?

Step 1 of 12

(1) Distinguish among the four types of wills:

Simple will: It is a will which leaves everything of an individual to his/her spouse and also called as “I love you will”.

Traditional marital share will: It is a will according to which the grantor will leave one-half of the adjusted gross estate (it is gross estate minus the debts and costs) to spouse.

Exemption trust will: It is the will according to which the entire thing will be passed to the spouse except the exemption amount of $2,000,000 in 2008 and $3,500,000 in 2009.

Stated dollar amount will: It is a will which allows the individual to pass on to the spouse any money which would satisfy the objective of the family.