Wills
Introduction
A will is a written document stating how you wish to have your property distributed upon your death.
Each state has regulations as to how a will is written so it is important that you discuss your will with an attorney or contact your State Attorney General’s office.
Common Questions
Do I need an attorney to draft a will?
Wills are important documents and you should consult with an attorney if you have any questions or concerns. Laws vary from state to state and websites providing information are not always correct or entirely current. There is lots of information available to help you create your own will, but proceed with extreme caution if attempting to draft your own will.
What if I have my assets in joint names and also name beneficiaries?
If you have property that is jointly owned by your spouse, that property will pass directly to your spouse upon death regardless of what your will states. Similarly, if you name individuals as beneficiaries on life insurance policies, pensions, or annuities these assets will pass directly to the beneficiary regardless of what is stated in your will
In other words, identification of beneficiaries are legal contracts that that precedent over certain directions in a will. It is important, therefore, that the beneficiaries that you designate for these contracts (pensions life insurance, etc) be consistent with the intent of your will. It is also important that you regularly check the listing of your beneficiaries to make certain the distribution of your assets will adhere to your wishes.
Does a will avoid probate?
Probate is a court process whereby your estate is distributed to your beneficiaries. If one dies with a will the probate court determines if the will is valid, hears anyone who may object to the will, orders that creditors are paid, and supervises the process by which your estate is distributed in accordance with the instructions in your will. The cost of probate is determined by state law but generally is 3-7% of the value of your estate.
What if I do not have a will?
If you do not have a will your estate will by distributed by a probate court in accordance with the laws of the individual state.
When should I update a will?
Your will should be reviewed periodically and updated if there are changes in your family due to birth, adoption, marriage, divorce or death. It should also be modified if you change state of residence, there are substantial changes in the property you own, or if there are changes in tax laws.
Title on Death
Have you considered having property or assets titled as “title on death?”
Most states have provisions to provide title in real property to be held in your name, but are transferable upon death to another person named in the deed or account (often referred to as “Transfer on Death” deeds or TOD deeds). The greatest benefit a TOD that no current ownership is vested in the person named as beneficiary in the deed – such ownership only occurs when the person named as owner on the deed dies. Upon death, the property is held by the person listed as beneficiary, thereby avoiding probate (although a probate case may, in some states, still need to be open so that an affidavit of death can be filed to establish the death of the person listed as grantor – but this takes only minimal effort and is not as costly as a “full” probate proceeding) A TOD can be established for vehicles, bank accounts and other assets. This is a simple process that involves contacting your bank or financial institution as well as changing titles of property such as autos or homes. Note that personal property such as watches, jewelry, art, furnishings cannot be designated as a TOD.
Resources
Federal Information Resource Center provides a useful publication on estate planning that includes a description of the following:
- Why you need a will.
- Elements of a will.
- Naming a guardian.
- Specific bequests.
The site also includes links to tax consequences of a will and how you may find an attorney to assist you in the preparation of a will.
MSN’s Money section contains an on-line article on why you need a will and addresses the following topics;
- Why you need a will.
- What a will does not cover.
- Thrifty ways to have a will created.
- Writing your own will.
How to Find an Attorney
The National Association of Estate Planners and Councils has a variety of information on their website and also provides a search function for finding a local attorney who specialize in estate planning.
The American Bar Association also provides a search function to help you find an attorney in your state who specializes in estate planning.
(photo: pareeerica)
