25th Feb 2014
It is said that you can’t take all the material things you have acquired in your lifetime with you after you pass away. This idea is what prompts “estate planning.” When estate planning, the estate owner decides what part of his estate goes to whom. It is not just a matter of deciding that a spouse gets this piece of real estate or your eldest child becomes owner of the family mansion, it is a matter of putting any wishes into writing. Mere utterances on one’s death bed just won’t do. This is where the legal mechanism known as a will comes into play.
A will is a legal document, meaning it must comply with certain legal strictures for it to be considered valid. As a wills attorney from Orange County, I think its important to understand that individuals executing a will must comply with the legal requirements; otherwise, the document will not be recognized in a court of law. The will must be written. It can be computer-generated, typed using a typewriter or even handwritten, even though a handwritten will has its own special requirements. It really doesn’t matter. What matters is the estate owner or more importantly, the heirs will have a document to show that they are the designated beneficiaries and that they are entitled to a specific piece of the estate.
Of course, a will must be signed by the person executing the will. Generally, there must also be witnesses who will affix their signature on the will. The estate owner’s signature is his proof that he is cognizant of every item in the will and abides by it. The signatures of the witnesses are important to prove that the estate owner did not execute the will under duress and that he was mentally lucid when he executed the will. The witnesses are also proof that the estate owner himself was the one who signed the will. (Otherwise, it could be alleged that the will was forged.)
Assuming the estate owner meets all the legal requirements for a valid will, he can then rest secured in the knowledge that portions of his estate will be transferred to the people he so indicated after he dies. That is the essence of estate planning: your estate or portions of it go to the persons or institutions you really care for.
As a wills attorney I have heard many misconceptions about estate planning. The idea that the state will take over the assets of a person who dies without a will, is just one of the many. This is not true. What will happen is that the state will transfer portions of the estate owner’s estate to a line of succession it has stipulated. This is known as intestacy. In many states, for instance, a married person who passes away leaving a spouse and children, will have the spouse and children as the immediate beneficiaries. If a person’s wishes follow the estate’s intestate’s line of succession, then he may not need a will. The state will just abide by the stipulated line of inheritance. Unfortunately, that is the exception rather than the rule. In my many years of experience, I have seen that the wills of decedents often are different from the intestate line of inheritance.
That then is the primary purpose of a will: a legal device in which the estate owner expresses in writing his designated beneficiaries and what portions of the estate will go to them. The courts will follow what is stated in the will.
What about a Living Trust?
Many estate owners execute a Living Trust and believe that this document is sufficient in lieu of a Will. This is not exactly the case. A trust is a legal document that lets you state your terms on how your assets are to be transferred when you pass away. The facility with which assets are transferred from the estate owner to the trust to the beneficiaries enables the heirs to save on gift and estate taxes. Assets which are not included in the trust go through probate when a person dies.
Also, a living trust must have a “pour-over will” to act as coordinating document with the trust. With a pour-over will, you can designate a guardian for your children of minor age. More importantly, a pour-over will ensures that all the assets you intended to be transferred into the trust are placed there – even if you failed to have these transferred to the Trust document at the time of your death.
Reviewing and Amending Your Will
Just as important as having a will is keeping it current to reflect your present personal and financial circumstances. Hence, it is a prudent idea for you to review your will from time to time. For example, you may have executed your will when you were still single, have no children and are just starting on your career. A few years later, you are now married with two children of school-age. You probably would want them to be designated as beneficiaries. However, if you died without amending your will to reflect your current stats, your spouse and children will be left with nothing. (This is when having no will may be better than a will which is not updated.)
You may also want to review your beneficiary designations for your 401(k), IRA, pension and life insurance policy since those accounts will be transferred automatically to your named beneficiaries when you die.
Making Your Will Litigation-Proof
Tompkins advises all estate owners to execute a will – regardless of the size of their estate. You may own a second-hand car, a small house, a life insurance policy and a modest bank account – or you may have an estate worth hundreds of millions, either way you need a will. Even if your possessions are few, you don’t want any disputes after you are gone.
The bigger the size of the estate, the greater the possibility that your will may be challenged. There are a number of points in which people may contest your will. These include:
· The authenticity of your signature. Is it really your signature or was it forged?
· Your state of mind when your executed your will. Were you in the right state of mind? Did you execute your will voluntarily?
· The witnesses. Witnesses should not be beneficiaries in the will. The will must have the minimum number of witnesses. (California law requires a minimum of 2 witnesses.)
· Proof of ownership. The estate owner must certify that he owns the asset he is bequeathing. The celebrated case of the University of Texas versus Ryan O’Neal underscores the need to show proof of ownership of assets, especially pieces of artwork.
Tompkins advises people to execute wills with the possibility that it may face legal challenges. Hence, the wills attorney from Orange County counsels individuals to always check with their estate planning lawyers to see if they will comply with legal requirements and if there may be any possibility for any serious legal challenge.
A will may be simple to make, especially if your estate is modest. Even if it’s a simple will, it is best to consult with a professional. Legal documents can be confusing and any mistake could deem your will as invalid.
As mentioned earlier, your will is your expression of your wishes as to who you want to receive parts of your estate when you die. When you have prepared a valid will which can withstand serious challenges, then your designated beneficiaries will receive the part of your estate that you earmarked for them. On the other hand, if your will was inadequately executed, your intended beneficiaries may not receive their inheritance in the shortest possible time – if at all. In other words, you will not get your wishes
Yes, the greatest benefit of a well-executed will is your peace of mind.