A Last Will and Testament
A Last Will and Testament (Will) is a document that states who will inherit your property (both personal and real) after you die and who you would like to put in charge. If you have young children, your Will may also express to the court whom you want to finish raising your children, as well as who will handle any money your children may have inherited (such as life insurance or personal injury proceeds following an accident.) This is often accomplished by including a trust for the children as part of your will.
You may make changes to your Will any time you like, if you have not become mentally incompetent. No person has a right to inherit from you, except your spouse. State law does not allow you to totally disinherit your spouse, without your spouse's permission.
A Will is only used when the courts are involved. This is called probate. If you have no reason for the courts to be involved, then the Will was just a pretty document that was never needed.
Court involvement is only needed if you have an orphaned asset. An orphaned assets is an asset that
- does not have a joint owner, or
- does not have a pay on death beneficiary, or
- does not have a transfer on death beneficiary.
For example: Gabe died owning a car in joint tenancy with his spouse, a house in joint tenancy with his spouse, an Edward Jones non-IRA investment account naming his spouse as the transfer on death beneficiary, and an IRA naming his spouse as the beneficiary.
Gabe's spouse automatically becomes the owner of the car and the house (yes, there is paperwork needed, but no court approval needed), Edward Jones and the IRA holder will transfer the money to the spouse. Boom. You're done. However, now Gabe's widow owns all these things all by herself. So, if she does not do any planning, she will have a lot of probate triggers at her death.
After your death, someone will take your Will to a lawyer who will prepare a petition for probate. The person you have nominated in your Will to serve as the executor, will likely be appointed as executor, if the person is willing and able to do it. If that person is not, the court will appoint someone else.
Once appointed, your executor will construct a list of the names and addresses of your beneficiaries and a list of all of the assets you owned at the time of your death, including those you owned jointly with other people and life insurance. This information is compiled in a document called an inventory and filed electronically with the state.
The electronic database is searchable by the general public, for a fee paid to the state.
A Will is an appropriate planning tool for:
- a single person planning to leave all assets to charity;
- a single person with children under 25 years of age, planning to leave all assets to a trust for the children.
- a married person with children under 25 years of age, who own all assets in joint tenancy with a spouse, and where both spouses plan to leave everything to a trust for the children, if both parents happen to die at the same time.
If one of these does not fit your scenario, and you think you have orphaned assets, then avoiding probate through the use of a Revocable Living Trust is probably a better option for you.
If you think a Will is the proper planning tool for you, call us now for a no-cost consultation.
Many people try to avoid probate by the do-it-yourself route of holding all assets jointly with someone who is not a spouse. We have seen this result in disastrous tax consequences and devastation to family relationships for the loved ones left behind.
See the information related to probate and revocable living trusts for more information on probate and how to avoid it properly.