The most widespread method people communicate their wishes about how they would like their property to be handled after their death is through a will. A will is much like an instruction manual for the probate court, which is the court that supervises the estate administration and any dispute over the will. A will gives the court guidance on how to distribute the decedent’s assets in compliance with his or her wishes.
In and Out of Probate
Wills are sometimes referred to as “tickets to probate court.” For example, in large estates, the only way one can legally transfer assets in compliance with the will is by going through the probate process. Wills only control the assets that can be transferred by the probate court, known as probate assets. Certain assets are typically not controlled by a will and do have to go through probate, for example:
- Life insurance proceeds that are paid to beneficiaries designated in the policy.
- Property held in a living trust.
- Property held in joint tenancy, which states that upon the death of one of the joint tenants, the decedent’s interest automatically transfers to the surviving joint tenant(s).
Due to the fact that the above assets are transferred by other ways other than probate, a will typically will not control how these assets are distributed.
In order to be valid, a will must meet specific formal requirements, or else it could be challenged during the probate process. Requirements vary depending on your state, but typically the person who is creating the will (the “testator”) must be an adult of sound mind. This means that the testator must fully understand the meaning of the document. Wills also must be written, with some states allowing the will to be in a testator’s own handwriting. However, in terms of what is enforceable, a pre-printed or typed document is the best option. A testator must sign their own will, or if they are unable to do so, then the testator is required to direct another to sign the will in front of witnesses and also be notarized. A will is enforceable until it is superseded by a subsequent valid will or revoked. Changes may be made through amendment (“codicil”) without needing a complete re-write.
Certain laws and legal rules may prohibit a testator from disinheriting spouses or dependent children, or from allowing full effect of other wishes. For example, if married, a person typically cannot fully disinherit their spouse without first getting the spouse’s consent (normally in a pre-nuptial agreement). In many jurisdictions, a surviving spouse will have a right of election, which will allow them to take a certain percentage, normally up to one-half, of the estate if he or she is dissatisfied with what is stated in the will. If the testator wishes to disinherit non-dependent children, it is best to state this explicitly within the will in order to avoid any ambiguity and potential legal challenges. Property such as property owned by joint tenancy may not be able to descend by will. Also, contracts that name a beneficiary such as bank accounts, pensions, and insurance policies must go to the named beneficiary.
An executor is usually appointed in a will to carry out the wishes of the testator upon their death. This personal representative is normally a family member or close friend, with an alternate choice also appointed. In order to guarantee that the chosen executor is aware and willing to assume the responsibilities of the position, it is best to advise them of his or her duties before the testator passes away. Duties of an executor include: filing necessary tax and court documents for the estate, consolidating and managing the testator’s assets, selling property to pay any estate taxes or other expenses, and also collecting any debts that may be owed to the testator at his or her death.
Dying Without a Valid Will: “Intestacy”
Survivors of the deceased could face a very time-consuming, difficult and expensive legal process if a person dies without creating a legitimate will or without making any alternative plans to distribute their estate. If a person dies without a will, this leaves their estate “intestate,” which may require a probate court to step in and divide the estate by utilizing legal defaults that give the property to surviving relatives. The court will first pay any unpaid debts and death expenses, then follow the default legal guidelines. These guidelines are contingent on whether or not the deceased was married, had children, and whether or not his or her spouse and children are living.
If the deceased has not immediate surviving family members, the estate will be divided amongst other known relatives. As a result of intestacy, people who the deceased never intended to leave property to may receive a part of the estate. In addition, intestacy laws only recognizes family members, therefore charities and close friends of the deceased will not receive any portion of the estate. If no relatives can be found, typically the estate will go to the local or state government. Intestacy also comes with the possibility of large taxes on the estate.
Probate: Not in Every Case
If a value of an estate and all its assets are below a certain threshold established by state law, then a short estate proceeding may be able to avoid the probate process all together.