Money Smart Jean Chatzky

Why you need a will

Scary new statistic: According to research from the legal publisher Martindale-Hubbell, only 42% of adults have a will. That's a sizable drop from 47% in 2000.

What's going on? Alan Kopit, legal editor at Martindale-Hubbell's Lawyers.com, point to two factors. First: inertia. “People are afraid to face their own death,” he says.

Second, many people believe they don't have a big enough estate to bother. Says Kopit: “If you don't have a will, the state gets to make decisions about who gets you property. I don't know about you, but I'd rather make those decisions myself.” Moreover if your a parent, your will is the only document that allows you to appoint guardians for your children.

So, what's the best way to get a will in place? That depends on the amount of money you're willing to spend.

$$. Hit the Net or buy software. Among web sites are Buildawill.com(which for $19.95, lets you write a will, and for $9.95 more lets you make unlimited changes) and Legalzoom.com (where a standard will costs $59 but comes with a review by legal assistants) Quicken WillMaker Plus 2004 lets you create other documents too, including powers of attorney for health care and finance. It lists for $79.99 but often sells for far less ($27.99 on Amazon.com at press time).

$$$. For $250 to $500 (in most cities), you can hire a lawyer to create a standard estate plan with a will, a living will, and powers of attorney for health care and finance. Ask friends and colleagues for references, then check Martindale-Hubbell.com for competence and ethics ratings. Ask the lawyers about their experience with situations like yours, and nail down the total charges.

$$$$. In a complicated situation—if you have significant assets (a home,cars, etc.) own a business, have a disabled child— you may need trusts to supplement your estate plan.These attach strings to your assets

so that, for example, your money won't run out during a disabled child's lifetime. Find an estate-planning lawyer, not a generalist, and expect to pay at least $500 for this service.