The Complete Guide to Wills: What You Need to Know Explained Simply

By Linda Ashar

Whether many people realize it or not, a will is a vital necessity in making sure all assets and wishes are properly attended to after death. Many more people neglect it because it seems too complex and time consuming. Fortunately, with this guide in hand, you will have a comprehensive outlook on exactly what a will entails and what you need to do to prepare one.

You will learn the basics of estate planning, starting with the outlining of your assets and understanding the various different forms of ownership style. The real and personal property lines, including how your marriage, children, and other legal relationships will affect your property rights, are included. You will learn what value life insurance can have and why every one should have an active policy before creating a will. In addition, you will learn how to measure and distribute assets from a pension, other retirement accounts, and if you own your own business.

Dozens of interviews were conducted with attorneys, tax accountants, and other experts to establish a set of clear guidelines to help you ensure your will is created with the best of everyone in mind. You will learn how to minimize the amount of taxes that will be levied on your estate, including through estate taxes, state taxes, and income taxes. A chapter is included that helps you outline and keep track of how you will keep your will updated as you age and your estate changes.

Atlantic Publishing is a small, independent publishing company based in Ocala, Florida. Founded over twenty years ago in the company president’s garage, Atlantic Publishing has grown to become a renowned resource for non-fiction books. Today, over 450 titles are in print covering subjects such as small business, healthy living, management, finance, careers, and real estate. Atlantic Publishing prides itself on producing award winning, high-quality manuals that give readers up-to-date, pertinent information, real-world examples, and case studies with expert advice. Every book has resources, contact information, and web sites of the products or companies discussed.

This Atlantic Publishing eBook was professionally written, edited, fact checked, proofed and designed. You receive the same content as the print version of this book. Over the years our books have won dozens of book awards for content, cover design and interior design including the prestigious Benjamin Franklin award for excellence in publishing. We are proud of the high quality of our books and hope you will enjoy this eBook version.

• Language: English
• Publisher: Atlantic Publishing Group Inc.
• Release date: Jun 17, 2011
• ISBN: 9781601387363

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The Complete Guide to Wills

What You Need to Know Explained Simply

By Linda C. Ashar, attorney at law and Sandy Baker

The Complete Guide to Wills: What You Need to Know Explained Simply

Copyright © 2011 Atlantic Publishing Group, Inc.

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Library of Congress Cataloging-in-Publication Data

Ashar, Linda C., 1947-

The complete guide to wills : what you need to know explained simply / by Linda C. Ashar and Sandy Baker.

p. cm.

Includes bibliographical references and index.

ISBN-13: 978-1-60138-312-9 (alk. paper)

ISBN-10: 1-60138-312-6 (alk. paper)

1. Wills--United States. I. Baker, Sandy Ann, 1976- II. Title.

KF755.A97 2011

346.7305’4--dc22

2011011350

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Table of Contents

Introduction

Chapter 1: Your Will and its Importance

Chapter 2: Basic Considerations in Drafting a Will

Chapter 3: Marriage and Wills — Important Considerations

Chapter 4: Life Insurance Plays a Significant Role

Chapter 5: Pensions and Retirement Accounts

Chapter 6: Beneficiaries and Gifts

Chapter 7: The Executor

Chapter 8: Providing for Children by Will

Chapter 9: Will Challenges

Chapter 10: Special Considerations

Chapter 11: Using Trusts with Wills to Protect Assets

Chapter 12: Medical Decisions and Incapacity

Chapter 13: Final Life Decisions

Conclusion

Appendix A: Estate Planning Worksheets

Appendix B: State Statutes Related to Inheritance Rights of Posthumously Conceived Children

Appendix C: Sample Durable Power of Attorney for Health Care and Advance Directive (Living Will)

Appendix D: Summary of Basic Will Information by State

Glossary

Bibliography

Author Biographies

Introduction

The last will and testament — a person’s final directive for the disposal of property and personal effects according to his or her will — is a more profound documentary of a person’s life than people realize or consider. Whether standing by itself or as a component of a more comprehensive estate plan, the will gives a person the opportunity to maintain final control over his or her affairs, define a plan for the future of others in the person’s life, reward those who have meaning in his or her life, care for those who depend upon him or her, and explain his or her final wishes.

A person’s will, when properly prepared and executed, is a legal document of serious weight and importance. Courts must enforce it. The deceased — the testator — is no longer alive but still speaks through the will and the court, and others must listen.

Many people shy away from preparing a will for a variety of reasons, including:

It is too difficult.

I do not own enough property to make it worth the effort.

Wills are for the rich.

I do not know where to start.

I’m too young to need to worry about a will.

Perhaps some may intend to prepare a will and just never get around to it. President Abraham Lincoln, a consummate lawyer, died without a will. Although he did not know he would be assassinated the day it happened, Lincoln certainly knew his life was in danger. Yet this did not motivate him to make a will.

Lincoln’s personal motives are unknown, but the most compelling — and likely truthful — reason most people avoid making their wills is the visceral tendency to shy away from the whole notion of their own mortality. People know death is inevitable, but planning for it can seem ghoulish or morbid at the worst, and at the least, distasteful. Some are superstitious and believe to write a will tempts fate to hasten their death. Regardless of such reasons, spending time drafting out the what ifs in case of one’s own death is not high on the weekend to-do list.

None of these are good reasons to refuse making a will. Anyone can make a will. Everyone should. A will can prevent a lot of confusion and save trouble for people left behind. It brings certainty to the chaotic emotions and disarray of affairs that follow in the wake of a death. It gives the testator final control of his or her property if there are no heirs to leave behind. The will can preserve items important to the testator; it can communicate his or her important ideas.

Wills have been recognized as important legal documents since ancient times. They existed in ancient Greece and Rome. Evidence of an oral will pronounced from a deathbed is found as early as in the Bible, in Genesis 48, in which Jacob bequeaths his lands and the future of Israel to Joseph, his sons, and his brethren. Inheritance rights of descent and distribution are an enduring concern of law and society.

One of the oldest written wills was unearthed in Egypt by the English archeologist William Petrie. Dated at approximately 2550 B.C., this will was written by an Egyptian named Sekhenren, who left his estate to his brother, a priest of Osiris. In some respects, our modern law of wills is directly traceable to ancient Roman law, which came along more than 2,000 years later, and even more recently to the English common law.

In the United States today, the laws governing the making and administering of wills are contained in the statutes of each state. Although there are common general principles across state lines, each state’s law has its own unique features. For example, some states still recognize deathbed oral wills — called nuncupative wills — under certain circumstances and if they afterward are conformed to a written will as prescribed by law. Many states, though, have abolished oral wills.

Wills, then, must be in writing and prepared with forethought. They can be stand-alone testamentary documents or part of an estate plan that also includes trusts, insurance, and death benefit instruments that are self-executing apart from the will. Whether a person needs a simple will or something more complex should be a question answered with assistance of legal counsel, ideally counsel who specializes in the field of probate and estate planning.

Will preparation should begin with the testator making an inventory that answers two seemingly simple questions: What do I have? and Where do I want it to go? These questions encompass more than determining the next home for the family’s prize heirlooms, though. There might be other considerations important to the testator, such as guardianship of minor children, care of adult dependents, provision for pets, or arrangement for charitable donations. Additionally, there are the legal formalities of drafting a will so it will be accepted and enforced by the court. It is important to understand how these goals and desires are set down in a legally enforceable document to ensure they will be carried out according to the testator’s intent.

The testator’s goals can be far reaching. People have used wills to further their social and scientific interests. The Nobel Prize was established in the will of Alfred Nobel, for example. Others have scorned family in favor of beloved pets. One of the most famous will controversies in this regard was the estate of hotel queen Leona Helmsley, who bequeathed $12 million to a trust for her Maltese dog, Trouble. She left nothing to her grandchildren, which triggered a will contest against her estate, worth billions. The court eventually cut Trouble’s share to $2 million and awarded $6 million to the grandchildren. The remaining $4 million from Trouble’s share went into a charitable trust. Thus, although a person generally has a free hand in declaring his or her intent in the will, there can be limitations. The Leona Helmsley estate illustrates the limits on bequests for the care of specific animals. Most states now have pet trust statutes to assist those who wish to cover this issue while planning their estate.

People often have used their wills, as well as trusts, to attempt to maintain control from the grave matters that are important to them. Often referred to as incentive provisions, such clauses in wills are designed to impose on others a certain lifestyle of thrift, health, morality, or achievement of specific goals. Examples are conditioning receipt of a sum of money upon enrolling in college, getting married within a year, refraining from smoking, becoming a teetotaler, or visiting the testator’s grave on a certain date every year. Such provisions can be challenged for reasonableness, but they are presumed to be enforceable unless proved otherwise. The testator’s intent is a powerful consideration. State laws also limit disinheriting spouses and impose a trust arrangement on the inheritances received by minor children, as well as appointment of their guardianship.

An estate need not be worth billions to require expert consideration for preparing a will. If one is not a mechanic, one obtains the services of someone who is a mechanic to make sure the car will run well and not break down before the trip has ended. The same common sense applies to organizing one’s last will and testament. Individual state laws, tax law, misconceived myths and notions about writing a will, and the probate process all require a person to be informed about the choices and ramifications that can affect the drafting of the last will and testament. Each person’s situation will have its own specific facts; each person’s last will for his or her affairs will be unique. To understand what can and cannot be done and at what cost, the testator should select a knowledgeable advisor to assist with estate planning. An estate plan designs the management of assets and liabilities of a person with the goal of conserving and distributing his or her wealth after death. An estate plan might need only a will.

In addition to the will, though, an estate plan might include a trust, a legally binding written agreement that holds assets and manages them for a particular beneficiary or group of beneficiaries. The trust is administered by a person called a trustee or a number of persons who act as co-trustees. It is the trustee’s job to manage the assets in the trust and make sure they are distributed in accordance with the instructions that govern the trust. Each trust has its own set of directions, determined by the person who created it, also called the settler, grantor, or trustor.

This book outlines the major considerations and features of wills and related estate planning elements. It is not legal advice. It does provide a baseline of information to help the reader formulate a plan and obtain legal advice to finalize that plan from a position of knowledge and self-understanding.

Table of Contents

Chapter 1: Your Will and its Importance

A will is a legal document that dictates the disposition of your estate after death. A will can be a simple one-page declaration that all property and assets shall go to one named person — a spouse or a child for example. It can also be a complex document that lists many bequests, conditions, and provisions relating to your last wishes for your estate.

To be legally binding, a will must contain specific declarations that evidence it is intended to be regarded as the writer’s last will and testament as opposed to simply a list of ideas not yet finalized. In legalese, the will’s author is called a testator.

Be in Control

A will directs what will happen to the testator’s property or assets. Many people misunderstand the term assets to mean only those items having formal title or residing in a financial institution. Thus, those who do not perceive themselves as wealthy assume they have no assets worth committing to a will. In reality, though, most people do have at least some items that will be subject to distribution to others upon their death. Only the testator fully knows and understands what he or she owns and its value. It is worth resolving what happens to these items by a will. Thus, in traditional legal terms, it is said that the testator must know the measure of his bounty.

Simply stated, any property individually or jointly owned by the individual is an asset. Assets include (but are not limited to) homes, vehicles, vested interests in pensions or retirement plans, insurance policies, real estate, investments, stocks, bonds, cash, promissory notes (as the lender), and personal property such as furniture, clothing, jewelry, rugs, collectibles, and paintings. Some of the things about which surviving relatives and other interested persons argue the most passionately are items of special meaning beyond their monetary value: Mom’s wedding dress, Dad’s diaries, Grandma’s antique settee, the buckeye tree in the front yard, Grandpa’s watch. These things cannot be cut up and distributed in parts and still retain their intrinsic value.

Additionally, parents should consider the appointment of guardians of their minor children. Who is the best person to make decisions about the children’s care and lifestyle? With whom are the children comfortable? Often, people request appointment of separate guardians for financial care and custodial care of their children. As well, those with elderly parents or disabled adult relatives might need to provide for their financial well-being. Some people might readily understand these considerations, while others might require advice to fully explore all available options and opportunities.

Without a will, a person dies intestate. In this situation, state law directs who inherits the decedent’s property and in what order of priority. This form of inheritance is called intestate succession. Some assume that if there is a surviving spouse, all will go to the spouse and there need not be a will to say so. However, although the surviving spouse indeed stands first in line under intestate succession, he or she will not necessarily inherit all by statute in every state. If there are also surviving children, for example, the intestate succession laws typically divide the estate among the spouse and children. Some people believe a life partner will be treated as a spouse, even though there was no official marriage. This is unlikely in most states. Another issue is whether there are unknown children who might show up after the parent dies. These are just a few of the many unanticipated, but possible, wrinkles that can arise when a person dies intestate. All of them can be addressed with certainty, according to the testator’s choice, in a will.

Another intestate problem arises when survivors who inherit as a group do not agree among themselves about tangible assets that cannot be physically divided. These assets will have to be sold so the cash value obtained can be divided equally among them. Did Dad intend for his antique boat to be sold or did he just assume his only son would get it because they worked on it together while his two daughters showed no interest in it? Assume Dad is a widower, and his three children are then his intestate survivors. If Dad does not make a will, his son is not his sole survivor by statute. If the three siblings cannot come to an agreement about the boat, it will have to be sold, that is, liquidated for cash. The boat will not go to the son as Dad might have wished, and additionally it might not bring what Dad would have thought it was worth in the ultimate sale, but Dad did not make a will to foreclose this outcome.

Also, intestate probate procedure is often more costly than testate (will) proceedings because it generally requires more paperwork and forms than when probating a will. Further, taxes can be minimized by advance estate planning. Such legal tax-avoidance measures will not be an option for an intestate estate.

It can readily be seen that a will can provide a means for a person to communicate clear information and directions about his or her