Last Will and Testament: Knowing the Basics Before You Sign
When getting ready to create a will, just like when you fill out a marriage license, buy a house or open a loan, it’s important to understand what you’re signing before you put your name to paper. To avoid feeling like you’re trying to speak a foreign language, here are a few definitions of basic legal terms and the answers to a few common questions you might have before you get started.
What Is a Will?
A last will and testament, also called a will, is a legal document that defines how you want your money and property to be distributed after your death. If you have children under 18, it will also outline the individual or individuals you wish the court to appoint as their legal guardian. Finally, the will can also outline your wishes regarding your funeral and burial.
Why Should I have a Will?
“According to Kerri Castellini, a trusts and estates attorney at Price Benowitz LLP in Washington, D.C. , “A Last Will and Testament is the only way to ensure that your wishes are followed after your death. A well thought out last will and testament can often minimize the estate’s exposure to taxes, family disputes, and administrative expenses. In many cases, it can also expedite the administration process so that more of an individual’s wealth can be passed on to their family and loved ones.”
Without the legal protection a will provides, those you leave behind could be forced to spend time fighting in probate proceedings or be denied the assets you wanted to leave them altogether. Your other request could also be ignored, such as where you wish to be buried and how. Planning ahead and ensuring that your final wishes are properly recorded will provide peace of mind to both you and your beneficiaries.
What Is an Estate?
Your “taxable” estate is the total of everything you own at the time of your death – money, property, retirement funds and life insurance – minus any debt you owe. Your “probate” estate refers only to the assets covered by your will.
What Is an Executor?
An executor is the person you name in your will to be in charge of your estate. This is no small task, as an executor has to make sure that your wishes are carried out. They will have to pay any outstanding bills and taxes and make sure that your assets are safe and secure.
What Is a Beneficiary?
A beneficiary is a person or organization (perhaps a hospital or charity) who will receive your assets. There is no limit to the number of beneficiaries you can name in your will.
What Is Probate?
Probate is a court process that usually lasts about six months, but in some cases, it can last more than two years. While it may seem tedious, it is the critical piece of the puzzle when it comes to asset distribution. The judge in probate has the authority to validate the will and order that the assets be distributed via a court order. Without the order, a beneficiary cannot take ownership of the assets, even if they are explicitly named in the will.
What Assets Can Be Included?
All of your assets can be included in your will, and listing them out specifically will make it easier for your wishes to be followed. You can pass on your home, your car, any of your investments and bank accounts, and much more. However, accounts and property that are owned jointly will automatically go to the other joint title holder. A joint title is given preference over the personal wishes covered in your will.
Are There Different Types of Wills?
Yes. There are many different types of wills, each used for different situations. Which works best will depend on your specific requests and requirements. An estate planner can explain the advantages and drawbacks of each type of will and help to ensure that you are satisfied with your choice.
Although your will can be drafted by a lawyer, a self-proofed will is one you can also write yourself. It’s typed up, and if it’s written by the individual, it is typically used by those who have a smaller estate. Witnesses will be required to sign an affidavit to the document’s validity in front of an official, such as a notary public.
A joint will is a single will shared by two people who are usually married. For example, if one spouse dies, he or she might have the will state that all property will go to the surviving spouse, and when they are both deceased, everything will go to their beneficiaries.
Although similar in intention to a joint will, mutual wills involve two almost identical documents for each spouse. Both state that in the event of your death, you intend to leave everything to your spouse.
This will does not involve any lawyers or legal documents. Instead, the document is handwritten, signed and then dated, all by the individual. Although this is the easiest and cheapest way to create a will, many states do not consider holographic wills to be valid, so be cautious.
Similar to a holographic will, no lawyers or documents are involved. This will is spoken aloud to witnesses while the individual is on their deathbed. Not all states recognize this will as valid, and those that do may have specific requirements.
A living will relates your wishes to your doctor and loved ones in the event that you become unable to speak for yourself. In essence, this covers your end-of-life medical care and details how you want to be treated if you fall into a coma or a vegetative state.
How Much Does It Cost to Write a Will?
If you choose to write the will yourself, there are a few low-cost options available to you. You can either write your own following a template or fill out a pre-constructed form. These forms can be found online for free, or kits can be purchased at your local office supply store. Whichever you choose, ensure that your document meets all of the legal requirements, as these can be different from state to state. These two options work best for people with small estates and no special requirements.
However, Kastellini warns against creating a will without the assistance of a lawyer: “Often when individuals write their own documents, either through an online program or themselves, the document presents errors that require extensive costs and delay, all of which could have been avoided by working with an attorney who is familiar with the language and concepts involved.” If your needs are more complicated, having your will drafted by a lawyer, although more expensive, will ensure your will is properly constructed.
Do I Need a Witness?
Yes. In fact, you will probably need two of three, depending on the state. Witnesses must be there to verify that you were of sound mind with you signed the will. Witnesses must be adults who are not a beneficiary or an executor in the will. If necessary, they could be called to testify under oath that they watched you sign the will of your own accord and were under no pressure to do so.