Last Will and Testament
What is a “Last Will and Testament”?
A will or a “last will and testament” is a legal document that tells your family and the courts how you would like your personal property and real property to be divided when you die. A will determines who will inherit and what they will inherit from you. Most wills are drafted by lawyers, typed, and signed by the testator and two witnesses in front of a notary public. If a will is not properly executed it will not be valid.
The thought of preparing or updating your will may make you feel uncomfortable, but having your will in good order ensures that all arrangements will be handled well when you pass away and it prevents your family from dealing with legal tangles.
What is the Benefit of a Will?
A last will and testament helps protect your family and property, and enables you to decide where you would prefer your assets to go in the event of your death. A will can be used to:
- leave property, real estate, personal items, cash, and other assets to people or organizations
- determine how your assets will be distributed to family or organizations
- leave money or assets to a charity of your choice
- arrange to pay your funeral expenses
- name or appoint a guardian to care for your minor children
- name a trusted person to manage property you leave to minor children, and
- name or appoint an executor or the person who makes sure that the terms of your will are carried out.
If you should die with a valid will, your assets will still go through the probate process according to state law. However, after creditors have been satisfied, the remaining assets go to whom you’ve identified in your will.
Not all assets are included in a will or are part of the probate process. For example, most life insurance policies and some retirement accounts have specified beneficiaries. The named beneficiary on your life insurance policy, retirement account, or IRA will receive the proceeds. This is also true of any investment accounts that have a designated transfer on death feature. You should review your beneficiaries on these types of accounts yearly to make sure the person to want to receive the benefit is person named.
The bottom line? While a court oversees the process, having a will allows you to tell the court exactly how you want your estate to be handled. But, a public probate is still guaranteed. If you care how your assets are divided you should seek legal advice.
Each state has specific laws regarding the execution of a will. A will that lacks the state-specific requirements may be found invalid. The basic requirements for a will include:
- Age. The testator must be a legal adult.
- Mental Capacity. The testator must be of sound mind and body, capable of understanding what he/she is signing.
- Written. Not all states will accept an oral, video, or handwritten will. It is good practice to have your will typed by an attorney who can advise you on the law in your particular state.
- Signature. The will must be signed by the testator or if the testator is unable to sign then by a person the testator directs to sign.
- Witnesses. While not all states require a will to be witnessed, it is good practice to have two witnesses to your will and to have the testator and witnesses sign in front of a notary public. It’s best to pick witnesses who aren’t beneficiaries to the will and don’t have anything to gain.
What does Self-Proving Mean?
In some states, a self-proving will is accepted by the court without contacting the witnesses who signed it. This is important if the people signing your will are not close relatives or friends who can’t be easily found when the time to probate your estate comes. To make your will self-proving, you and your witnesses need to go to a notary and sign an affidavit that proves your identity and that you’re fully aware that you’re signing the will.
What Happens If You Die Without a Will?
If you should die intestate, your estate will go through probate and all the world will know what you owned, what you owed, and who got what. Your mortgage company, car loan company, and credit card companies will all seek payment on balances you owed at the time of your death.
Each state has specific laws regarding how your property is divided if you die without a last will and testament. These laws are called “intestacy” laws. Generally, intestacy laws provide that your closest relatives, beginning with your spouse and children will inherit. If your spouse and children predeceased you the list continues with increasingly distant relatives, including parents, grandchildren, siblings, grandparents, aunts and uncles, cousins, and your spouse’s relatives. If the court exhausts this list to find that you have no living relatives by blood or marriage, the state will take your property.
However, there are many factors that contribute to who gets what and when.
- For example, if your only heirs are your children and you have not provided any instructions, state law will mandate divvying up proceeds equally.
- Your older children will get their shares immediately if they’ve attained adulthood.
- But, the court will appoint a guardian to manage the money for your minor children until they become adults.
- Shockingly, that guardian can charge a lot of money and be a total stranger – as can the guardian who raises your child.
- Yes, if you die without a valid will, the court, not you, will decide who raises your minor children.
Keep in mind that since your death has been published to alert valid creditors, it’s not uncommon for predators (fake creditors) to come forth and make demands for payment – even if they’re not owed anything.
The bottom line? Dying intestate allows state law and the court to make all the decisions on your behalf – regardless of what your intent might have been. Publicity is guaranteed.
When Should You Update a Will?
You should update your estate plan after you get married, draft or update a prenuptial or postnuptial agreement, have children, adopt a child, adopt an adult child, or get divorced. You should also consider updating your plan if the size of your estate changes or you buy or sell a property.
Administrators: Administrators are appointed by the court to do the job of executing a will.
Beneficiaries: Beneficiaries usually receive property through a trust.
Decedent: The decedent is the person who has died.
Devisees: A devisee or legatee is someone who receives property through a will.
Elective Share: Most states provide for the surviving spouse to receive a share of the assets regardless of how the will intends for assets to be divided.
Estate: The estate is the money, real property, and personal property the decedent left to be divided.
Executor: An executor is a person named in the will to probate the will.
Health Care Power of Attorney: A document that appoints a person to make your health care decisions if you are unable to do so.
Heirs: The term heirs is generally used to describe people who inherit when there is no will.
Living Trust: A document that places your assets in a trust that allows you the benefit of your assets during your life and directs the division of your assets to those of your choice at your death.
Living Will: A document that directs your family and medical providers about what living saving measures you want taken.
Mutual Wills: Typically used by married couples, the spouse who outlives the other cannot modify his/her will.
Oral Will: Testator speaks his or her wishes but does not make a written record. Oral wills are not widely accepted and may not be valid in many states.
Personal Representative: A personal representative is someone who administrators the will.
Pour-over Will: A pour-over will is used to fund a trust.
Power of Attorney: A document that appoints one or more persons to make decisions about your property, finances, investments, and other matters.
Probate: Probate may be used to describe the process for administration of a will or estate. It may also be used to describe the type of court as in a probate court where wills are determined to be valid “probated”.
Right of Survivorship: Many bank accounts, retirement accounts, and life insurance provide an option for a right of survivorship. If the decedent elected to a name a survivor on these accounts they may not be included in the probate process. Rather, the accounts would pass directly to the person named as having the right of survivorship no the account.
Trust: A trust creates a legal relationship where a person or entity holds the property for the benefit of someone else. There are many reasons people choose to set up a trust. Trust documents will be created to describe the purpose of the trust and how the property held in trust must be used or distributed.
Trustee: A trustee is a person who is responsible for carrying out the requirements of the trust. The trustee is in a fiduciary relationship.
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