How to understand a Will
Updated: Sep 11, 2020
A will, also known as a Last Will and Testament, is a legally enforceable declaration of how an individual wants their property and assets distributed after death. In a will, a person can also recommend a guardian for their minor children and make provisions for their pets.
According to bookish language, a Will is a document introducing the intended manner of an individual in which he declares how he wants his property to be distributed after death. It has certain formal requirements which are provided according to the laws of each state. Most states accept a Will executed in another state as long as it is valid considering the laws of the state in which it was drafted.
When should you make a will?
A Will should be processed and prepared during the lifetime of the testator, which refers to a time when he is in good health and free from any kind of emotional barriers. A sagacious person does not wait for a catastrophe or other compelling reasons before making a decision. A Will should be established so that you can exercise the most control over your estate. If a person dies without a Will, they are said to have died “intestate” and in such situations, state laws determines how and to whom the person’s assets are distributed. This includes guardianship of minor children.
The true value of having a Will should not be underrated. If a person dies without a Will, beneficiaries cannot conflict over the court's decision on the distribution of an estate following the intestacy laws. Even if the decedent verbally wished something different and it was not documented anywhere, state statutes control distributions. For charitable individuals, it is important to remember that there may be no provision for charitable giving in some states such as with Alaska intestacy laws.
Some important things to be noted regarding a Will is that it is not effective until the death of the testator; it can be amended by duly executed alterations or by supplementary document attachment which is known as codicil. Again, a Will can be changed by the testator anytime by its destruction or by making another Will that revokes the earlier Will or is inconsistent with its provisions. With the changed circumstances such as marriage, remarriage, children or divorce, the testator may feel the necessity of revoking the previous Will. A testator may make different wills that relate to different assets, but any provision relating to a particular asset will be invalidated by an inconsistent provision in a later will.
The Cost of a Will
You can make your own Will in many states. However, drafting one may require the advice of a professional depending on your particular situation. If an estate is very straightforward with no possibility of complication, a testator may decide to not employ the services of legal counsel for drafting a Will. Nevertheless, consultation with a lawyer is always highly recommended. A will may be challenged by your relatives; or you may also decide to disinherit a relative for some reason. In such individual situations, a practicing lawyer can be your best help in avoiding pitfalls while preparing a Will.
Generally, a lawyer charges according to the time spent in preparing a Will. Yet, it is still the most convenient way because a few hours of an attorney’s time may turn into great savings in taxes and probate expenses. Usually the cost of the surety bond, which may be waived by a Will, exceeds the lawyer’s charge for preparing a Will. The fees can be discussed with the lawyer in advance.
Does a Will Control how all of my Estate is distributed?
Property is transferred in three basic ways which include:
1. Operation of law. This includes things like jointly-owned property with right of survivorship, such as a joint savings and checking account.
2. Contract examples include Individual Retirement Account (IRA), designations, life insurance contracts, and trust with testamentary provisions.
3. Will includes remaining items that do not otherwise transfer ownership by operation of law or contract.
It is important to have a clear idea on how property ownership is transferred. Even if the property is designated following a particular way in the Will, that designation can be overridden by the operation of law, such as a joint account with right of survivorship, or the contractual agreements such as IRAs. The assessment of all property is important to ensure that your property is designated in a way consistent with your demand. For example, if you want to designate a certain beneficiary to receive money from a retirement account, you must name the person as the beneficiary in the contract documents. Usually life insurance policies will designate the beneficiary as part of the official documents with the company.
What if I don’t want to make a will?
There are other ways to transfer property apart from probate. One common and popular method is a Revocable Living Trust. This is a type of legal procedure in which properties can be transferred under the control of the individual who established the Trust.
The primary benefit of establishing a Trust is that once your property is included in a Trust, it gets excluded from the public record of probate. But since it is more complex than a Will and thus, it is more expensive to generate. Moreover, it needs to be dictated how you want the property to be handled. This is because transferring property using a Trust means transferring the ownership of the assets to the Trust first. Many experts still recommend having a catchall Will that makes mention of the Trust as well as handling any properties that may have not been transferred to the Trust. Even still, because of the ease and low cost, most people are comfortable with only a Will, especially if they consider their estate small or basic.
What if I don’t have a big estate?
Estate can comprise any amount of property whether it is a huge amount or a small one. If you own a home or are buying one, you have an estate. Your personal and familial circumstances can influence a lot in determining whether you want to establish a Will for planning your estate.