Creating A Will by
Atty Jim Hentz
DO YOU HAVE A WILL?
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.
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
· 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
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
· 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
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
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
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."