Defining Last Will and Testament
A last will and testament is a legal document that expresses the desires of a decedent (someone who has died) as to what will happen to his or her property and assets upon his or her death.
In order for a will to be legally valid it must spell out exactly what property and assets the grantor (another name for the decedent) has at the time of his or her death and who the grantor wants each asset and/or piece of property to go to upon his or her death.
A will traditionally also appoints an executor, or a person who is charged with overseeing the process of the transfer of the decedent’s assets and property once the decedent passes away and, if necessary, deal with any problems or disputes which arise during that process.
Although having an attorney who is familiar with your state’s inheritance and probate laws prepare your laws is a smart move to ensure that a will is legally valid and accurately reflects your wishes, a will does not necessarily even need to be prepared by an attorney in order for it to be legally valid.
Instead, a person can create his or her own will and, in most states, is even permitted to do so in handwritten form if all other requirements in that jurisdiction for creation of a valid will are met.
One requirement of a valid will usually requires that the will be signed in front of several witnesses and that the testator (the person signing the will) be of sound mind when signing the will. The sound mind requirement means that the person understands the assets and property he or she has at the time he or she signs the will and that the person understands who she is giving each of those assets to.
How Does a Will and the Process of Probate Actually Work?
When a person dies, the last legally valid will that the decedent signed is submitted to probate by either the decedent’s executor or the decedent’s beneficiaries to begin the process of opening the decedent’s estate and then disbursing and transferring the decedent’s assets to the named beneficiary or beneficiaries identified in the will.
To disburse assets identified in the will requires filing a petition for administration of a decedent’s estate, paying a filing fee and submitting a copy of the will, the death certificate, and other documents to the court.
(Probate is the name given to the process by which a will is submitted to the court for approval, the decedent’s estate is opened and then the decedent’s wishes as expressed in his or her will are carried out by the executor subject to the oversight of a judge).
Once the required filing fee has been paid and the petition and will have been properly submitted to the clerk of court for a formal proceeding for the administration of an estate to be opened, a case will be opened by the probate court and it will be assigned to a specific probate judge.
Note, a will does not avoid probate. See the difference between a will vs a trust for more.
The extent of involvement by the probate judge going forward depends entirely upon how complicated the particular situation is and whether any problems arise during the probate process which may require judicial involvement. More complicated estates may require many trips to probate court and years to wrap up.
Some last will and testaments are very straightforward and go through the entire probate process with little to no judicial involvement other than the judge signing various form orders that are required in order to open the case, deem the will as legally valid, and to close the case once the probate process has been completed and all debts of the decedent have been paid, assets and property have been transferred to their intended recipients.
Others may require more judicial oversight and involvement such as if, for example, multiple persons are contesting certain provisions of a will or the authenticity of the will that has been submitted to probate in the first place.
Although the process of probate does differ from state to state, there is normally a requirement that all potential creditors of the decedent’s estate be notified so they can file a claim of estate, a certain amount of time is required in which creditors are allowed to file claims before assets are disbursed pursuant to the decedent’s will.
(So, for instance, if the decedent owed $100,000 on a house that was to be sold pursuant to the terms of her will and the sale proceeds divided among three beneficiaries, the executor would ensure the lender would be paid that $100,000 before the remaining funds were distributed to the three beneficiaries).
The Benefits of Having a Will: It Leaves Nothing to Chance
The process of dying without a will is known as dying intestate. Dying intestate is such a common occurrence that every state has a scheme of inherit to be transferred to the person’s next of kin.
(A survey completed by website Caring.com in January 2018 found that more than half of people in the United States surveyed did not have a will or other estate planning device in place, such as a living trust, with only 42 percent of those surveyed having any formal estate planning documents at all.)
Given these findings, and given the high likelihood that most people will die without, rather than with, a will, the typical state inheritance law will specify a list of the recipients that will receive a decedent’s property or assets upon his or her death absent a will which specifies to the contrary.
The states inheritance laws are a statutory list that orders who gets what if you have no last will and testament in place. The state intestacy laws usually include a person’s spouse first in the list and then his or her children and then various other family members, such as parents, grandparents, siblings, etc.
However, if someone wants something specific to be done with particular asset or want to leave his or her assets and/or property to someone outside the normal chain of inheritance that runs contrary to the decedent’s state inheritance laws, then this shall not occur if the decedent dies intestate.
A last will and testament gives the decedent the power over what happens to his or her assets upon his or her death. It gives the decedent the chance to appoint a trusted person as the executor to ensure that any issues which arise are handled in a manner consistent with the decedent’s wishes as expressed in the will.
More importantly, however, a will also gives a decedent the chance to express his or her wishes as to who will be raising his or her children or pets once the testator passes away and how exactly the decedent wants his or her assets or property distributed upon his or her death rather than leaving this job to whomever the applicable state legislature has designated should receive those assets.
Limitations in Having a Will or the Enforcement of the Provisions of a Will
Although virtually all provisions of a will generally will be upheld under most jurisdictions’ laws, there are some limitations on what a person can and cannot do in a will.
The limitations on wills typically involve the type of property that a person can transfer upon death by means of a will, including certain instructions that cannot be performed through the vehicle of a will, as well as certain limitations on who the beneficiaries under a will can be.
As it relates to regulating beneficiaries who may inherit under a will, most states will not permit a married person spouse to disinherit his or her spouse in a will without first receiving written permission from the disinherited spouse in the form of a prenuptial agreement or similar such arrangement.
There are also certain types of assets that are not necessarily governed by what the provisions of a will may or may not provide because other legal instructions given by the decedent may instead govern the disposition of that asset. These are commonly known as non-probate assets.
For example, if someone dies and has a 401k account at his or her workplace and attempts to leave the proceeds of that account to someone in his or her will, but the person had a different beneficiary associated with this account with the 401-k custodian, then whatever instructions were last on file with that 401-k plan’s custodian will govern.
The same is true of life insurance proceeds. All types of life insurance pass via the beneficiary designation in the life insurance contract. That is why it is important to make sure your beneficiary designations are up to date, rather than rely on your life insurance passing via your provisions in your will or trust.
If you’re like most of us, the idea of contemplating one’s death and making legal preparations for that event regardless of our current health status is never really all that much fun.
Which is probably why…
So many folks (even those who have been living with a chronic terminal illness for years) fail to make even the simplest of plans in light of the inevitable.
The good news is…
That despite how “uncomfortable” one might think the whole process of creating a last will and testament is, the truth is it doesn’t have to be all that bad. In fact, it can be quite liberating once done because now you’ll know that all of your final wishes will be fulfilled.
For those ahead of the game and are getting a last will and testament in place early on, you may be surprised by all of the different options that may be available to you as you begin to prepare for retirement later on in years.
For more information…
About how we here at I&E can help achieve your financial goals, feel free to give us call.