The most common way that people assert their preferences regarding the handling of their estate after their death is in a will. Many also use a will as a tool to convey feelings towards family and loved ones. If a will is well written, it can ease the transition of transferring property and also avoid tax burdens.
It is estimated that a minimum of seventy-percent of Americans do not have a valid will. Creating a valid will can bring great peace of mind because it gives you a say on how your final affairs will be handled. Wills can be as simple as a one-page document or can entail several volumes. It all depends on the size of the estate and the preference of the person creating the will (known as the “testator”). A will describes the estate, specifics of who will receive certain property (known as the “devisees”), instructions regarding the care of minor children, charitable gifts, and if any posthumous trusts shall be formed. Some people also choose to specify within the will that a person is to be disinherited. Keep in mind that when creating a will, a testator is required to follow all legal rules regarding the creation of wills in order for the will to be effective.
Requirements for creating a will vary within each state. In general, the testator must be an adult who is of “sound mind,” which means that they must be able to fully understand the meaning of the documents. It is also required that will be written; some states permit a will to be hand-written, but if possible it is better to use a pre-printed or typed document. A testator must sign the will. If the testator is unable to sign on their own behalf, they may charge another person to sign for them in the presence of witnesses. All signatures must have witnesses and/or be notarized. If a will is valid, it will remain in force until it is superseded by a valid will or revoked. Changes can be made to a will without a complete re-write by amendment (“codicil”).
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.
Appointing a Representative
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.
Choosing a Guardian
People with minor or dependent children may employ a will to name a guardian for their children in the event there is no surviving parent to care for them. If a guardian is not stated in a will, then a court may have to appoint someone as guardian. This person that is court-appointed may not necessarily be someone that the testator would have chosen as guardian of his or her children. A testator normally will choose a family member or close friend as guardian, and many often also name an alternate. It is important that a potential guardian know that they have been chosen for this position and completely understand what being a guardian entails. This choice of guardian may also affect other provisions within the will, such as a testator wanting to provide financial support to the guardian to aid in the raising of the children.
When No Valid Will Exists
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.