Do You Need a Legal Will?
The Ten critical Steps to Make a Legal Will
With or Without An Attorney
A basic will is a simple document used to transfer your own property to whomever you want to get it after you die. If you have a modest estate and simple wishes about what you want to do with it, you can make your own legal will.
Some people donít want to face the thought of their death. It is an emotional and psychic hurdle. But wouldnít you be happier to know that your plans are in place, and your wishes will be respected after you are no longer here? With a will, you know that your loved ones are provided for. A will ensures that, if death comes unexpectedly, your loved ones will not have to deal with this additional burden in their time of grief.
Do You Need a Legal Will?
Without a will, the court will determine who gets your money, property and personal belongings, and will divide your assets among close family members. The court determines who will get custody of your minor children, without regard to your wishes. The court will appoint an attorney to manage your estate, and will pay attorneyís fees out of your estate. Wouldnít you like to choose for yourself what happens? That's why you need a will.
Most married couples can prepare their own wills. Usually the husband and wife want to leave their property to the other spouse. And if that spouse isnít alive, then all property is to be divided equally between their kids. These wills are straightforward and easy to draw up.
If you are a widow or a widower, itís likely that you want to leave your property equally to your children. You expect that if any child precedes you in death, that childís share is to be divided equally between the surviving children. You can use Do It Yourself legal forms to prepare your will yourself.
Do You Need An Attorney to Make Your Will Legal?
Most people can prepare their own wills, by using Do-It-Yourself forms and templates. But if your affairs are involved, youíll be better off with the help of an attorney who specializes in estate planning. In some cases, you should not prepare your own will. If you have a complex family situation, if your property is complicated, or if you have diverse beneficiary plans, you should seek the help of an attorney to prepare your will. If someone in your family has a disability or special needs, and you want to provide for them, you should ask an attorney for advice. If you expect your heirs to fight over the will and contest your provisions, you should use the services of an attorney. If you want to create a trust protecting property for two generations, an attorney will be your best guide.
Who Can Make a Legal Will?
To write a will, you must be 18 years old, and be of sound mind, which is to say that you know what a will is, know what you are doing, understand your relationships to people and know what you own.
What is a Legal Will?
A legal will is a document in which you make provisions for child care and distribution of your assets after your death. A legal will is typewritten, signed and witnessed. A few states recognize handwritten wills that were not witnessed, but you shouldnít even consider these holographic wills, because itís so easy to prepare a valid will. Oral wills are very rare. Only a few states accept a spoken will, and only when the circumstances are unusual, such as the oral will of a dying soldier on a battlefield. Donít rely on making a video instead of a will, because no state has authorized a legal video will. You want a will that will stand up in court, without questions of forgery or fabrication.
What is Probate?
In Probate Court, the will of a person who died is filed with a court, an executor is appointed, and the property is located and gathered by the executor of the estate. Debts and taxes are paid, and the remaining property is distributed as the will directs. Most property must go through probate.
Probate has its drawbacks. Your estate is in probate for a year or more before the heirs receive their property. A lawyer is required and is entitled to fees, which are paid out of the estate. There are ways to avoid probate, but they require the use of an attorney to plan for your estate, and they are costly upfront. If your property is modest and uncomplicated, you will probably want to preserve your assets now, rather than pay high fees.
Will You Have to Pay Estate Tax?
Your estate consists of the assets and liabilities you own at your death. After you die, your executor pays the federal estate tax with money from your estate. By law, small estates are exempt from the estate tax. The personal federal estate tax exemption in 2008 is $2 million. Those who die in 2008, if they own less than $2 million, do not have to worry about estate tax. The estate tax exemption will change by law to $3.5 million in 2009, and $1 million in 2011. At present there is no law about the estate tax exemption for 2010, but that could very well change. If your net worth is more than the estate tax exemption, the services of an estate-planning attorney can save your heirs money.
Making Your Legal Will. Choose Your Beneficiaries
Primary beneficiaries are the people who will receive your assets. An alternate beneficiary is the person you choose to receive your assets if the primary beneficiary dies before you. You may decide to will specific assets and money to certain people, for example, the house to Jane, the jewelry to Mary, and so on. Whatís left in your estate is called the residuary estate, and you should choose a residuary beneficiary to receive it. Youíll also want to choose an alternate residuary beneficiary in the event the residuary beneficiary dies before you.
Making Your Legal Will. Choose Your Executor
The executor has the legal responsibility for handling and distributing your property as your will directs. Choose an alternate executor as backup. The executor should be willing to do the job and be completely honest and aboveboard. It is more convenient if the executor is also a resident of the state where you live. The executor will collect and list the assets and liabilities, pay any debts, hire a lawyer to handle probate, arrange for tax returns to be prepared, and distribute the assets to the heirs. The executor receives a fee from the estate for services rendered.
Making Your Legal Will. Choose the Survivorship Period
Suppose that your have willed all your assets to your spouse. And also suppose you and your spouse were involved in a car wreck. You died immediately and your spouse died a week later. Does your spouse inherit your assets? Does your spouseís will kick in and transfer your assets to your spouseís heirs? It depends on the survivorship period you choose in your will. If you specified a survivorship period of less than a week, your assets are inherited by your spouse. But maybe you chose the survivorship period to be a month. Because your spouse did not survive you by a month, your spouse did not inherit from you. Instead, your alternate beneficiary inherits from you. The Do It Yourself legal forms you use often specify a 45-day survivorship period. If the survivorship period is any longer, the will is tied up in probate longer.
Making Your Legal Will. Decide What Your Spouse Will Inherit
In the majority of states you cannot disinherit your spouse. You must leave your spouse at least one-half of your estate. These states are called common law states. The rest of the states are community property states, where each spouse owns half of the community property of the marriage. In these states, a spouse has no automatic right to inherit from the other spouse, unless the will specifies it. Community property states are Arizona, California, Idaho, Nevada, New Mexico, Texas, Washington, and Wisconsin. In Alaska you may choose to own your assets as community property or not.
Making Your Legal Will. Whom Do You Want to Disinherit?
If you leave your childís name out of the will, the state will still give them a share of your estate. You can only disinherit a child by expressing your specific intention in the will. No one else except your spouse and children have the right to inherit from your estate. So omitting any other person from your will isnít disinheriting that person, because they werenít entitled to inherit in the first place.
Do It Yourself wills generally do not include a place for comments from you to the bereaved. If you want to explain your decisions to your heirs, you should write a letter to accompany your will. Be certain to explain that this letter does not modify or extend your will in any way.
Making Your Legal Will. Simplify Your Will for Your Heirs
You may want to will a shared gift to your heirs. For example, you might leave your house as a shared gift, 75% to your sister and 25% to your nephew. Shared gifts can introduce problems in the administration of your will. The heirs might disagree about selling the asset. One may want to occupy the house, and they may disagree on the rent to be paid.
Making Your Legal Will. Assemble and List Your Property
Itís likely you already know what you own, house, car, bank accounts, savings account, personal property, investments, retirement accounts and IRAs. But not all of these can be transferred in your will. When you signed up for a bank account, an investment account, an IRA, a 401(k) or a profit-sharing plan, you specified a beneficiary in the event of your death. These accounts will pass automatically to the beneficiary and will bypass probate. The beneficiary named in your life insurance policy will automatically receive the face amount of the policy. These assets wonít pass through the will or the probate court. You cannot name the beneficiaries for these assets in your will. Only the beneficiary named on the account will inherit it.
Real estate is another area where ownership is a factor in estate planning. If you own real estate as the sole owner, you should include it in your will, and the property as well as any mortgage outstanding will pass to the beneficiary of your choosing. Unmarried partners often hold the real estate as Tenants in Common, with shared ownership, usually 50-50. As Tenant in Common, you are free to will your share of the real estate, but not your partnerís interest.
Spouses often own property, real estate or a bank account, in joint tenancy with right of survivorship. Upon the death of a spouse, the other spouse automatically owns the property. You cannot will this property to someone else. If you will this property to another beneficiary, your wishes have no effect and your beneficiary receives nothing.
If you own a partnership interest in a business, there is likely to be a buy-sell agreement between the partners, which specifies how the property will be settled in the event of the death of a partner. You cannot override the buy-sell agreement in your will.
When you write your legal will, donít overlook items of sentimental value, like family heirlooms, collections, religious items, journals and photographs.
Your will should cover only the property you own at the time of death. If you mention a specific gift of jewelry for Aunt Ann, and in the meantime the jewelry has been lost, sold or given away, the gift is null and void. But the rest of your will can still be enforced.
Making Your Legal Will. How to Provide for Your Children
Your spouse has the legal right to assume custody of the minor children in the event of your death. Adopted children are treated the same as biological children in this regard. But stepparents do not have the legal right to custody of stepchildren after the death of a biological parent. The judge will usually decide to award custody to the other biological parent. If you have a preference for another guardian, you should consult an attorney.
In the event that both parents die, you will want to name a personal guardian to raise your children. Usually the guardian will manage the money youíve left for your children, too. Make sure in advance that the person you choose as a guardian is willing and able to assume the responsibility. Youíll also want to name an alternate guardian, in the event that your first choice is no longer able to follow through.
In most states children cannot own property and money outright, except for a few thousand dollars. If you leave them money in your will, you must provide for an adult to manage it. A childrenís trust will manage their money for their benefit without court supervision. You may also appoint a property guardian to manage their money, and any other money the children receive later. You should create with your will a separate childrenís trust for each child, and appoint only one trustee to oversee all of them. You should also designate a successor trustee as your second choice. The trustee should be at least 18 years old, someone who cares for your children, is scrupulously trustworthy, and has basic money management skills. If you fail to appoint a manager for your childrenís money, the courts will do it for you, at your expense, with ongoing and expensive oversight.
Making Your Legal Will. How to Provide for Your Pets
Sad to say you canít leave money or property to pets outright in your will, because the law thinks that pets are not people. To provide for a pet, arrange in advance with a person who is to receive the pet and will them money for the petís care. At least 38 states will allow you to set up a pet trust and fund it for the care of your pet, but a trust is a more expensive alternative than a trusted friend.
I hope life brings you much success. I wish you a very happy day.