Using a Will to Pass on Your Estate

The Benefits of a Will as an Estate Planning Tool

It’s a common misperception that wills are necessary only if you have a substantial net worth or a complicated estate with many potential heirs. But a will does much more than direct the distribution of your assets. It can also be used to designate a guardian for minor children, ensure that final debts and expenses are paid, and address tax obligations. Furthermore, if you die without a valid will in place, your estate passes under the laws of intestacy, which may or may not be consistent with your wishes. A simple will can be prepared and executed without significant expense or complication and provides more benefit than detriment.

What Is a Will?

A will, referred to in some jurisdictions as a “testament” or “last testament,” is a legal document that sets forth a person’s wishes and directs an appointed representative, most often known as an executor, to take certain actions to honor those wishes. Among the actions that can be directed by a will are these:

• Appointment of a person to act as executor of the estate
• Distribution/disposition of real and personal property owned by the deceased (also known as the testator)
• Creation of a trust (known as a testamentary trust) for the benefit of heirs and the details of such trust, including the appointment of trustees and the management/disposition of property in the trust
• Appointment of a guardian to care for minor children or any incapacitated party for whom the deceased had legal responsibility
• Payment of all final debts and obligations
• Preparation and filing of all tax obligations

The History of Wills

Though most people understand that the concept of a will has been around for centuries, few people realize that a legal document similar to a modern will was first used in ancient Greece. In those days, only male citizens could own property and, by law, property could only pass to male heirs. Property could be shared by male heirs, but a daughter could not inherit her father’s property (her sons could, though).

The ancient Romans introduced the concept of testamentary capacity, requiring that the person making the will be of sound mind. The Romans were also heavily influenced by the rise of Christianity, and for centuries, the church was the primary beneficiary of most wills.

Many of the concepts developed by the Romans were subsequently adopted in early English law governing the transfer of property upon death. Most of the rules now governing wills in the United States were carried over from the English common law.

The Different Types of Wills

Though all wills must meet certain formal requirements to be considered valid and enforceable, there are nonetheless several acceptable forms that a will may take:

• Simple wills—Typically drawn on behalf of one person, the simple will customarily includes provisions for disposing of real and/or personal property, appointing executors or administrators, appointing guardians for minor children, and ensuring final settlement of debts and filing of taxes.
• Pourover wills—Instead of transferring property to specific heirs, a pourover will transfers all assets of the deceased to a trust created before death in a separate document (an inter vivos trust).
• Joint wills—A joint will operates much like a simple will but governs the assets and wishes of two or more people, typically a husband and wife.
• Holographic wills—A will in the deceased’s own handwriting is known as a holographic will and is usually unwitnessed.

Requirements to Create a Valid Will

As a general rule, wills are governed by state law, so the specific requirements and formalities vary from jurisdiction to jurisdiction. However, some requirements are fairly universal:

• The testator (person signing the will) must be a certain age—Most states require that the testator is 18 years of age or older. Some states allow exceptions for people who are married or enlisted in the military who have not reached the necessary age.
• The testator must be of sound mind—
  • The testator must know what a will is and must understand that they are executing one.
  • The testator must understand what property they own.
  • The testator must have the mental capacity to make decisions about the distribution of property.
  • The testator must understand and recognize their relationship with the named beneficiaries.
• The will must be in writing—Though some states allow the validity of handwritten, or holographic, wills, most states require that a will be typed or printed.
• The will must be witnessed—The will must be signed and dated by a certain number of witnesses (usually more than one), none of whom are beneficiaries named in the will.

Why You Should Have a Will

If you die without a will or other estate plan in place, your estate (including all your assets) is subject to the laws of intestacy in your state. These laws are discussed further below. While those laws may involve the distribution of your assets in a manner close to your wishes, you must have a will to completely control how your property is divided.

In addition, a will addresses more than just the distribution of property. Your will can also be used to designate who will care for your minor children.

Furthermore, a will helps you minimize the potential stress and anxiety your loved ones might experience after your death, as it minimizes the likelihood of expensive and time-consuming legal proceedings to determine how your assets should be allocated.

What Happens When You Don’t Have a Will?

If you die without a will, your property will be divided according to the laws of intestacy in your state, which typically favor spouses and children but may include specific distributions to parents, siblings, and others who were financially dependent on you. The distribution of your estate will be according to your state’s formula, rather than your wishes. In addition, the determination of who will care for your minor children typically is made by the court, with potentially expensive and time-consuming proceedings to resolve.

Choosing an Executor for Your Will

You should exercise great care in naming the executor of your estate. You want a person who is willing to serve, who understands the responsibilities involved, and who will strive to honor your wishes. You also want someone who will be available and accessible at the time of your death, so that the estate can be settled in a timely manner.

How to Ensure That Your Will Is Properly Validated

Most states require the executor of a will to produce documents verifying that witnesses observed the testator signing the last will and testament. A few states will accept a “self-proving affidavit,” a separate document wherein the witnesses attest to witnessing the will being signed. Two states—North Dakota and Colorado—will validate a will that has been notarized.

Changing the Terms of a Will

A will can always be changed, most often with an amending document called a “codicil.” A will can also be modified by a subsequent will, provided it changes the terms of the original will. Any codicil or subsequent will must, however, meet all the legal requirements of the initial will regarding soundness of mind, formalities, and witnesses.

Summary

The execution of a valid will offers a great degree of control over the distribution of your estate, as well as the care of any minor children alive at the time of your death. There are, however, specific legal and formal requirements that must be met. A will can always be modified, provided that the new will or codicil meets all legal requirements.