Things to Know About Wills

Posted on September 28, 2011

A last will and testament is an important part of estate planning.  Whether you need a will now or already have one, I want to give you a few things to think about when putting your estate plan together.

Without a Will

If you die without a last will, which is called “dying intestate,” the state in which you lived will determine who gets your assets.  The rules for distributing assets vary by state, but they are typically spelled out by statute and interpreted and applied by a probate judge after your passing.  To say the least, these rules are rigid.  They do not take your wishes or the wishes of your loved ones into account.  Moreover, probate can be very, very expensive for anyone dying without a will, especially if minor children are involved.

Executing a Will

A last will and testament must be created to get out of the default state rules for the distribution of assets when one dies intestate.  In order for a will to be enforced, certain requirements must be met:

  • The person executing his or her will (the “testator”) must be of sound mind at the time of execution.
  • The testator must be executing the will out of her or his desire to do so.  It cannot be executed out of duress or other undue influence.
  • The testator must sign the will in the presence of two witnesses.  Wills do not need to be notarized, but having a document that “self proves” that the will was properly executed can avoid a lot of expenses down the road.  I can help with that process.

Probating a Will

Generally, if your estate is less than $50,000 (more in some states), your will won’t need to be probated.  However, if you leave assets to minor children, probate will probably be required.  Your will should be drafted to minimize probate expenses, in the event that court involvement is unavoidable.  If you wish to avoid probate altogether for certain assets, contact me to discuss more advanced estate planning tools such as pay-on-death accounts, joint tenancies, and living trusts.

Distributing Property

Wills generally make two types of distributions: Special and General gifts.  A special gift is a distribution of a particular item or dollar amount to a particular person.  It takes the form of “I bestow my gold watch to Kim.”  A general gift, on the other hand, bestows a particular percentage of a general pool of assets such as “10% of my stocks to Nate.”  Under normal circumstances, special gifts are allocated before general gifts.

Naming an Executor

Your will should specify a person who is responsible for distributing your assets and carrying out your wishes.  This person is the executor of your estate.  There are few types of property that pass directly to your heirs, without the involvement of an executor, including:

  • Life insurance policy proceeds
  • Retirement plans such as 401(k) plans and IRA accounts
  • Pay-on-Death bank accounts
  • Property held in joint tenancy or with right of survivorship

Many, Many Other Issues to Consider

I’ve touched on just a few of the issues that you need to consider when drafting a will, but there are many others that are beyond the scope of this article, such as guardianship and creating testamentary trusts.  Sure, it’s true that you can buy will creation software that will cover some of the basics of drafting a will, but no software can ever provide you with a customized plan that takes your unique situation into account.

Contact me today and mention this article, and I will give you a free Family Wealth Planning Session, which is normally valued at $750.00.  During this session, I will conduct an in-depth review of your situation and craft a customized plan that fully meets your needs.

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