Creating A Will by Atty Jim Hentz


In reflecting over this past year's events, there were many wonderful moments that I shared with my family.  Unfortunately, there were also a couple of "not so wonderful" moments too.  It then occurred to me, especially after the "not so wonderful" moments that I did not have a Will in place incase anything should ever happen to me or my wife.  As a father of 2 small children, it is my responsibility to institute a Will to assure that they will be safe and well taken care of in case of a disaster.  In consulting with other members of my family and friends, I realized that not having a Will has become common place. 

However, the repercussions of not having a Will in place can be very catastrophic for those you love and care for.  Especially if you have strong intentions for providing for those loved ones, once you can not.  It is therefore to those of you that fall into this category of "have not" that I dedicate this article to.  I tried to cover all areas that I felt were necessary to define as well as areas of interest.  As we look ahead in 2005, I urge you to please find the time to invest in a Will; for you and for your loved ones.

Wills and Trusts

Wills and Trusts are devices which you can use to provide for the distribution of your estate upon your death.  Wills and Trusts are tools in a larger process of planning for the disposition and administration of an estate when the owner dies, known as Estate Planning.  Estate planning includes drawing up a will, setting up trusts, and minimizing estate taxes, perhaps by passing property to heirs before death.

For some reason, in today's society, there is an unfortunate, widespread misconception that Wills and Trusts are only topics of interest to the wealthy. In reality, an estate plan provides the legal mechanism for disposing of property upon death in a way that identifies your requests and the needs of your survivors, while at the same time diminishing taxes. For many individuals, Wills and Trusts, can be used to plan for the management of affairs in the unfortunate case of issues regarding disability, and for the intensely personal medical alternative considerations as life nears its end. With this in mind and to many individual's surprise, Wills, Trusts and the topic of Estate Planning are therefore not just for the wealthy. 

In order to decide whether a Will or a Trust is ideally suited for your needs relies on your situation. A living Trust is a popular alternative to the traditional Will, but you should weigh the advantages and disadvantages of each before deciding on one form or the other.  

Getting Started

The simplest way to ensure that your funds, property and personal effects will be distributed after your death according to your wishes is to prepare a will. A will is a legal document designating the transfer of your property and assets after you die. Usually, wills can be written by any person over the age of 18 who is mentally capable, commonly stated as "being of sound mind and memory." Other states may impose additional requirements.

Everyone Should Have a Will

Although wills are simple to create, about half of all Americans die without one (or intestate). Without a will to indicate your wishes, the court steps in and distributes your property according to the laws of your state. Wills are not just for the rich; the amount of property you have is irrelevant. A will ensures that what assets you do have will be given to family members or other beneficiaries you designate. If you have no apparent heirs and die without a will, it's even possible the state may claim your estate.

Having a will is especially important if you have young children because it gives you the opportunity to designate a guardian for them in the event of your death. Without a will, the court will appoint a guardian for your children!

Basic Elements of a Will

Here are the basic elements generally included in a will:
Your name and place of residence
A brief description of your assets
Names of spouse, children and other beneficiaries, such as charities or friends
Alternate beneficiaries, in the event a beneficiary dies before you do
Specific gifts, such as an auto or residence
Establishment of trusts, if desired
Cancellation of debts owed to you, if desired
Name of an executor to manage the estate
Name of a guardian for minor children
Name of an alternative guardian, in the event y our first choice is unable or unwilling to act
Your signature
Witnesses' signatures

Two of the most important items included in your will are naming a guardian for minor children and naming an executor

Name a Guardian

In most cases, a surviving parent assumes the role of sole guardian. However, it's important to name a guardian for minor children in your will in case neither you nor your spouse is able and willing to act. The guardian you choose should be over 18 and willing to assume the responsibility. Talk to the person ahead of time about what you are asking. You can name a couple as co-guardians, but that may not be advisable. It's always possible the guardians may choose to go their separate ways at some later date, and, if so, a custody battle could ensue. If you do not name a guardian to care for your children, a judge will appoint one, and it may not be someone you would have chosen.

Name an Executor

An executor is the person who oversees the distribution of your assets in accordance with your will. Most people choose their spouse, an adult child, a relative, a friend, a trust company or an attorney to fulfill this duty. You should expect your estate to pay an independent executor for this service.

If no executor is named in a will, a probate judge will appoint one. Probate refers to the legal procedure for the orderly distribution of property in a person's estate. The executor files the Will in probate court, where a judge decides if the will is valid. If it is found to be valid, assets are distributed according to the will. If the will is found to be invalid, assets are distributed in accordance with state laws.

Responsibilities usually undertaken by an executor include:

Paying valid creditors
Paying taxes
Notifying Social Security and other agencies and companies of the death
Canceling credit cards, magazine subscriptions, etc.
Distributing assets according to the will

What is a Living Will?

A living will is not a part of your will. It is a separate document that lets your family members know what type of care you do or don't want to receive should you become terminally ill or permanently unconscious. It becomes effective only when you cannot express your wishes yourself. If your state recognizes a power of attorney for health care, have one executed to authorize someone to act in accordance with your present intentions.

What Transpires During the Execution Of Your Will?

A Will is the legal document that allows you to, upon your death; distribute your property to those you choose. A Will allows you to designate beneficiaries to receive specific items from your estate, and other beneficiaries to receive everything else. For example, if you want your car, your house, or your antique stamp collection to be given to a specific individual or establishment, you appoint that person or organization as the beneficiary.

Another consideration includes, who's going to make sure that your antique stamp collection goes to the appropriate person? Well, this responsibility would fall to the executor of your Will (as I previously mentioned, the executor is the individual you authorize to accomplish your requests).   A Will also allows parents of minor children the opportunity to nominate a guardian. The court makes the final decision when appointing a guardian for your children after your death, but the court will usually accept your nomination. A guardian's legal responsibility is to provide for your child's physical welfare.

What Transpires During the Execution Of Your Trust?

A trust that is created during the grantor's life time by the revocable (the grantor may make changes at any time prior to death) transfer of property to a trust, but retains the power to alter the trust. The trust assets avoid probate and publicity upon the death of the grantor. All assets in the trust are treated as an incomplete gift and do not change the income, estate or gift tax status of the grantor.

Unlike a Will that is executed following a death, a living trust can actually start benefiting you while you are still alive. A living trust is a trust established during your life span. As mentioned previously, it is revocable, allowing you to formulate changes. Essentially, you transfer all of your property into your living trust during your life span, and any omitted assets can be transferred into the trust at the time of death through the use of a simple process of merely pouring any assets not titled in your trust into your trust after death, a practice known as Pour-over Will. You should always make a Pour-over Will at the time that you establish your trust.

A living trust will be applied as the instrument to control your property before and after your death.  In addition this tool will be used to provide how those assets, and the revenue earned by the trust, are disseminated after your death. In the unfortunate event that you should become incapacitated or disabled, the trust will be in position to administer your monetary affairs, usually by a successor trustee, if you were serving as trustee.

A living trust is not subject to the official process of proving the validity of a will, known as Probate, therefore, all provisions of the trust will remain private. Probate can also refer to the certificate, granted by the Family Division of the High Court of Justice, which states that the Will is authentic and valid, and that the executor of the will has the right to administer it.

Another option to Living Trusts is what is known as, Joint living trusts.  A Joint Living Trust simply combines the assets of a husband and wife into a single trust, governed by a single trust document. However, if estate tax minimization is important (for combined estates which will exceed $625,000), the joint living trust must be very carefully drafted with the help of an attorney in order to achieve the desired goals.

What Are the Advantages of a Will?

Although probate fees may be incurred at death, the cost of preparing a will is substantially less than a living trust.
The estate may not need to be probated when an estate consists entirely of joint accounts, payable-on-death accounts, and joint tenancy property.
Probate should not be avoided in some estates. This is particularly true where disputes among heirs are likely or where claims or sizable lawsuits may be pending. Probate offers a statutory means to handle disputes among heirs and claims against an estate. These procedures are not available to the trustee of a living trust.
Possible after-death income tax savings. If you are in a high income tax bracket and own assets that will continue to produce substantial income after death, probate may result in income tax savings because both the estate and any trust created in the will are separate taxpayers and income can be split between them through proper planning.

What Are the Advantages of a Living Trust?

Lifetime management, including management during periods of incompetence, without court intervention.
Privacy, as probate records are public.
Probate is avoided and costs are generally lower after death. Routine probate-related legal serves are avoided. Depending upon the complexity of the estate and the organization and adequacy of your records, such fees can be substantial, especially if you own property in more than on state.
Time savings, as probate can take a year or more. Most routine work in a living trust can be accomplished in a few weeks after death.
Tax services generally are the same in both cases.

For comparative purposes, I have incorporated a brief chart listing out several differences between a Will and Living Trust.  This chart is illustrated in the 'Lectric Law Library Stacks information board.

Will Living Trust
Probate Subject to probate proceedings. Out -of-state property requires probate proceedings in that state, as well.Provides court supervision for handling beneficiary challenges and creditor disputes.Becomes public record at the time of your death. Not subject to probate proceedings. Avoids the cost of a second-state probate proceeding where there is out-of-state property.No automatic court supervision to deal with disputes.Remains private.
Tax Savings Same tax saving provisions available as are available in a Trust.
Management of your Assets In addition to the Will, must use a Power of Attorney or Conservatorship to manage assets. Allows you as the grantor to manage the Trust assets as long as you are willing and able. Makes provisions for a successor trustee to take over in your place.
Costs Costs less to prepare a Will than a Trust. Cost to probate a Will can be substantial. Costs more to prepare, fund and manage a Trust than to prepare a Will. But avoids probate costs if all assets were held by the Trust

What Happens If I Don't Have a Will or a Living Trust?

If an individual should perish prior to establishing a Will, the assets belonging to this person fall into the control of the state.  The legal term for dying without a Will is dying intestate. Not specifying through a valid Will or Living Trust who will receive your property, gives jurisdiction to state law to control and generally distribute your property to your spouse and/or your closest heirs. This may or may not be what you intended.

Additionally, if you neglect to appoint a guardian for your minor children, the state could appoint someone you don't confide in as a legal guardian of your minor children. In conclusion, by disregard to appoint someone to carry out your requirements, the state can appoint anyone to be the administrator of your property.  However, the newly selected administrator may have to pay certain fees or post a bond at the expense of your estate, before he or she can begin to distribute your assets.

Where do I Keep My Will?

Once your Will is written, store it in a safe place that is accessible to others after your death. If you name a trust company as executor, it will hold your will in safekeeping. You can keep it in your safe deposit box, but be aware that some states will seal your safe deposit box upon your death, so this may not always be the safest place to store your will. Make sure a close friend or relative knows where to find your will. If you had an attorney prepare your will, have him or her retain a copy with a note stating where the original can be found.

How Much Does It Cost To Have a Will Written Up?
If you are writing your own Will, you can probably purchase a software package that can range from about $100.00 to $200.00 based on manufacturer appeal.  If you decide to opt for a qualified attorney, your cost will fall into a range of between $300.00 dollars (Simple) to $1,500 dollars and over (Very Complex) based on the intricacy and magnitude of the assets, wishes and instructions of the will. 

Who Can Prepare and Outline My Will?
If you have the appropriate knowledge and background, you can attempt to construct a Will by yourself.  The downfall to this option is that you may still overlook some of the necessary legal issues and ramifications that are involved regarding a Will.  If you decide to prepare the will yourself, I would still suggest you seek a knowledgeable attorney to at least examine the will once it is complete.
My best recommendation is for you to seek legal council to prepare and execute your Will.  In seeking a competent and qualified attorney, you eliminate uncertainty and risk and allow yourself to feel confident that all legal aspects of your Will have been targeted and addressed. 

Securing Your Legacy
The end of your life is something you probably don't want to dwell on, but thinking about what will happen to your loved ones and your assets and personal possessions is important. Making sure you've done all you can to make their lives easier will give you peace of mind. And once your will is drafted, you won't have to think about it again unless something significant in your life changes.

A living trust may save money on an overall basis by avoiding probate, but costs more in legal fees at the beginning. A will is less expensive at the beginning, but may eventually cost more because of probate costs and fees. Both accomplish identical estate tax savings after death.

Use of a living trust requires you to assign your assets to the trust during your lifetime through the use of assignments, new deeds, and re-registration of assets. This can become time consuming and expensive. A will avoids such lifetime assignments and associated costs, but incurs similar costs and additional probate costs at death. There is no general rule about which plan is best, and the choice turns on consideration of all the above aspects. Consultation with a competent attorney will help you make the right decision. Therefore, much care should be taken to select such attorney.
Ultimately, in completing a Will or Trust, you secure your legacy to your loved ones, with the absolute knowledge that your intent will be carried out to the full extend of the law.

"This article is dedicated to my friend, John "Jack" Dougherty, for his strength, perseverance and wonderful sense of humor."


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