What Is a Will and Why Do I Need One Now?
A will is a legal document that states your intentions regarding the distribution of your property and the care of any minor children. Your final wishes might not be carried out if you die without making a will in a written legal form. Additionally, it could take more time, money, and emotional effort for your heirs to claim, distribute and settle your assets following your passing.
A will, sometimes known as a last will and testament, can get quite near to resolving all of the issues that may come up after your death. Simply put, a will refers to a legal document that contains your directions for assets and dependents. The information you require regarding such a significant document is discussed below.
Purposes of a Will
Some believe that only extremely affluent individuals or those with complex holdings require wills. However, there are many justifications for having a will, such as:
Ideal Will: Written and Witnessed
Make a testamentary will if you want to ensure that your desires are carried out as much as possible. The most typical sort of will is one that you draught and sign in front of witnesses. It's undoubtedly the finest protection against possible challenges to your assets after your passing and ensures better and hassle-free survival for your family members. Even though you can draught a will on your own, having one prepared by a trusts and estates lawyer usually ensures that it will be worded precisely, correctly, and under the laws of your state.
Additional Forms of Inheritance Wills
While a testamentary will is most likely your best option, numerous other will forms exist and are used to varying degrees. Such essential types are as follows:
Wills in Holograms
Holographic wills, which derive from the less often used secondary definition of the word holograph, which means a document hand-written by its creator, are wills written and signed by the testator but not witnessed. Such wills are frequently used when there is a lack of time and witnesses, such as when the testator is involved in a potentially fatal accident.
However, only half of the states recognize holographic wills. In states that permit legal papers, the will must meet basic standards, including proof that the testator created it and had the mental ability to do so. Even then, the will's legitimacy is frequently contested due to the lack of witnesses.
Voiced (Oral) Wills
Oral wills, in which the testator expresses their preferences in front of witnesses, are the least well-known. Oral wills are rarely recognized by the courts because they do not have a written record or at least a record that states whether or not it was made by the testator.
Usually, a married or committed pair wills are executed in this manner. The conditions of the mutual will are binding upon the surviving party upon the death of one party. Mutual wills can be used to make sure that property goes to the deceased person's husband or wife, or children. A mutual will should be prepared with the aid of a legal expert due to variations in state contract law. Although they have similar sounds, a shared will and a mutual will are not the same.
Note: A distinct type of will called a "pour-over" will is used in conjunction with creating a trust into which your assets flow.
What is covered by a Will?
You can specify how your valuables, like cash in the bank, real estate, or priceless items, should be dispersed by making a will. Your will can specify who gets your business or investments and when if you have them.
You can also designate a charity (or charities) to receive assets through a will. A will can also ensure that your wishes are followed if you leave assets behind.
While most of your assets are usually covered by your will, some aren't. Payouts from the testator's life insurance policy are among such omissions. The funds will be distributed to the named beneficiaries (Nominees) of the policy. The same is probably true for any investment accounts that have "transfer on death" set as their designation.
There is one important exception: if the beneficiaries of those assets outlived the testator, the policy or account reverts to the estate and is distributed in accordance with the terms of a will or, in the absence of a will, by a probate court, a division of the legal system that deals primarily with wills, estates, and related issues.
Most states have elective-share or community property laws that make it illegal to leave your spouse out of your estate. A court may overrule a will if it leaves the surviving spouse with less of these assets than what is required by state law, which is often between 30% and 50%.
A will specifies your choices for whom you want to be the guardian, such as for your young children, in the case of your passing, in addition to directing your assets.
The Price of a Will
As previously mentioned, you can write your own will for no cost, but there is a chance that you could make a mistake that will ultimately cost your heirs losing money. If you prefer a checklist to make sure you are including everything necessary, online services like LegalZoom or Will maker by Quicken offer standalone services or bundles that include different estate planning documents.
For a simple will, you can expect to pay anywhere between $300 and $1,000 if you prefer to work with an attorney in person. This price may vary based on your location and the complexity of your document. Attorneys in smaller cities and towns typically bill for less time, with an hourly rate that ranges from $100 to $300 on average.
Trusts and Wills
Even if you have a trust, a legal tool that enables you to restrict how your assets are dispersed after your death and, frequently, to reduce gift and estate taxes, a will is still beneficial. This is because, as opposed to handling all of your possessions, most trusts exclusively deal with certain assets, such as a piece of real estate or a life insurance policy.
A trust may also be established as a means of providing for a beneficiary who is not of legal age. The trust will be transferred to the beneficiary once it has been determined that they are competent to manage their assets.
Even if you have a revocable living trust into which you can transfer the majority of your assets, you still need a pour-over will. A pour-over will allows you to choose a guardian for your children and guarantees that all the assets you meant to transfer to the trust are done so, even if you forget to retitle part of them before you pass away.
Any property not retitled in the trust's name is regarded as susceptible to probate. Therefore, if you have not yet indicated in the will who should receive such assets, the court may decide to give them to heirs whom you may not have even specifically chosen.
What happens if I don't have a will?
The state will be in charge of distributing your assets according to predetermined rules if you pass away intestate, which means without a will. Due to the elective share and community property laws, the formula frequently results in your spouse receiving half of your inheritance and your children receiving the other half. A surviving spouse who may have relied on most of your assets to sustain his/her level of life may suffer if such a scenario leads to the sale of the family house or other assets.
If your children are minors, additional problems can occur since the court will appoint a representative to safeguard their interests. Since an inheritance tax penalty can be reduced by a well-drafted will, dying intestate may also have tax repercussions.
Beginning the Writing of Your Will
Create a list of your assets and obligations before writing a will. Include all of the items you want to give to a specific person or organization, such as the contents of safe deposit boxes, family heirlooms, and other valuables.
Make a list of the items you want to allocate to specific heirs if you want to leave them pieces of personal property that will eventually be included in your will. Additionally, a letter of instruction, which is a separate document kept with the will, can be used to specify the recipients of particular assets. If you only include assignments in this letter, make sure that it is enforceable where you live; some states do not recognize them.
In contrast to the will, the letter of instruction might be worded more casually. Additionally, it may contain information that may aid your executor in settling your estates, such as account numbers, passwords, and even burial instructions. Other appendices to the will, such as a power of attorney, a medical directive, or a living will, may provide instructions to the court on how to handle affairs if a person becomes physically or mentally incapable.
If neither you nor your spouse has a will, you might be tempted to create a single, all-encompassing document. Refuse to indulge when tempted. Joint wills are hardly ever suggested by estate planners, and some states don't even recognize them. Even though your will and your spouse's will may appear to be very similar, it makes more sense to have separate wills.
How to write a will and validate it?
To create a legally binding will, you don't require expert assistance. There are countless software tools and DIY (Do-it-yourself) websites that can help you if you feel confident doing the work on your own. The document must be witnessed after it has been written, usually by two people who are known to you and are of sound mind.
Any adult over 18 who is considered competent may serve as a witness to your will. However, picking a "disinterested witness" is necessary; somebody who isn't a beneficiary and doesn't have a personal or financial interest in your choices. In certain states, you need at least two witnesses.
While choosing a lawyer as a witness might be wise; however, if that lawyer also wrote the will, the lawyer shouldn't be called as one of the witnesses.
To find out whether a will also needs to be notarized, you must check the laws in your state. You may consider filing self-attesting affidavits from your witnesses, even if that formality is unnecessary. When a document is signed in front of a notary, it may speed up the probate procedure by lowering the possibility that witnesses will be asked to testify in court to verify their signatures and the validity of the will.
A Will's Executor: Selection
The executor of the estate must be someone who is currently alive. Usually, the spouse, adult child, or another trustworthy friend or relative serves as the estate's executor. You may also choose joint executors, such as your partner or spouse and your lawyer.
The executor is often overseen by the probate court to make sure the will's instructions are carried out. If your affairs are complex, it may make more sense to choose an attorney or someone with legal and financial experience. If your situation is complicated legally or your estate is big (in the millions of dollars), it makes sense to hire a lawyer. If so, make sure to engage with a will writer who is well-versed in your state's legal requirements. Your state bar association may be able to help you find a reputable attorney.
Giving your executor the authority to handle your finances and deal with debt collectors is few of the most crucial things your will can accomplish. Make sure your will's language permits this and gives your executor the freedom to handle any connected matters that aren't expressly covered.
How to store a Will?
Your original will is often needed before a probate court can handle your estate. The document must be kept in a place that is both safe and convenient to access. Avoid keeping it anywhere your family could require a court order to access it, such as a bank safety deposit box. An excellent substitute is a waterproof and fireproof safe within your home.
Let your executor at least know where the original will is kept, along with any other pertinent details like the safe's password. Additionally, it's a good idea to send duplicate signed copies to the executor and, if you have one, your attorney. The signed copies might be used to prove your intentions in the event that the original is misplaced or destroyed. The absence of an original will, however, can make things more difficult, and without one, there is no assurance that your estate will be distributed the way you had hoped. So, you must store the document accordingly.
Changes to a Will
You might never need to amend your will. However, if needed, you might also decide to update it frequently. Remember that only the most recent version of your will that is still legally binding at the time of your passing will be taken into account.
A reasonable rule of thumb is to review your will every two to three years and throughout significant life events. These occurrences might be a marriage, a divorce, or the birth of a kid. For instance, your children won't likely require guardians listed in a will after they reach adulthood.
Modifying your will is simple. To update an outdated will, you can write a new one or add to it with a codicil, which is an addendum. Similar to when the original will was formed, two witnesses are often required to sign a codicil. However, several jurisdictions have relaxed the rules governing codicils and now allow them to be notarized before a public notary.
Adjustments should ideally be made while you are well and of sound mind. This reduces the possibility that your preferences will be effectively overturned and averts making judgments in a rush or under great emotional stress.
Can I share a Will with my spouse?
You can share a will as a married couple, although most lawyers advise against it. This document is sometimes referred to as a joint will and is signed by both partners. However, the surviving spouse is not permitted to amend the will in the case of the first partner's death. The majority of attorneys advise mirror or reciprocal wills instead. The mirror will let each spouse designate specific assets and property to go to the other spouse in the event of their passing. When circumstances change, the surviving spouse is then able to revise the will.