A will is a formal legal document detailing the disbursement of your assets. It is crucial to the success of an estate plan that your will be properly in accordance with state law. The laws governing the drawing up of wills vary considerably from state to state.
For example, holographic wills (those written in a person`s own hand) are considered legal in certain states but illegal in others. States such as Utah, have recognized the average person`s need for simplified universal wills, which are prepared forms written by the legislature that can be used in lieu of a formal will. In complicated estate cases do-it-yourself wills fail to satisfactory substitute for a formal will.
If you die without a will, you forfeit the right to direct the dealings of your estate. This will likely result in needless legal disputes, damage to personal relationships, and sometimes, financial tragedy. A will is an opportunity for you to designate your own executor, guardians for minor children, and other fiduciaries, rather than relying on the probate court to appoint them for you. Trustees for minor children or other beneficiaries of your estate can be designated in a will, and their powers can be tailored to the anticipated needs of those beneficiaries.
Even if you have neither a spouse nor children a will is the best means of fulfilling your wishes as relating to your estate. Courts are unlikely to award portions of an estate to non-relatives or charities when blood relations (no matter how distant) can be found. This point is critical people who were adopted into a family unrelated to their natural family; in such a case, dying without a will (intestate) can result in needlessly complex legal work and expenses to clarify disputes between adopted and blood relations. A will is also critical if you have made personal and emotional commitments to another person without being married and would like them to receive some part of your estate.
Even those who have shifted the majority of their assets into trusts designed to bypass the probate process, or who use joint ownership, should draw up a will. Most property owners inevitably leave behind an estate simply because the estate planning tools are not designed to shift all assets away from the probate process. Properties and assets will still be held in the sole control of their owner for convenience and management reasons. Plus, there is no guarantee that the designated heir(s) will survive, so with a will you can designate secondary beneficiaries. Estate planning is more than just tax planning, it is planning for the future of your heirs and beneficiaries.
Another misconception about having a will is the idea that having a will causes your heirs to have to go through probate, and that it will be difficult and expensive. If you die without a will, the court is still going to have to oversee the distribution of your assets to your heirs. There is absolutely no reason to think that this process is made easier or less expensive by your not having a will. In fact, it will probably be more expensive. For one thing, whoever administers your estate will probably have to post a surety bond if you don’t have a will. If you do have a will, not only can you choose the person who will administer your estate, you can provide that he or she will not have to post a surety bond.
If so, you really need a will. If you don’t have one, the probate court will have to set up a conservatorship to manage your children’s share of your property. A judge will decide who manages the money. When each child turns 18, he or she will get his share, whether they can handle it or not. If you have a will, you can decide who will manage your children’s inheritance on their behalf and you can choose the age at which you want it to be distributed to them.
Even if your estate is small, there are good reasons to have a will. You should see an attorney who practices in the area of estate planning or wills and trusts. This attorney can also help you decide if you need more advanced estate planning techniques and help you implement an estate plan that is best suited to your needs.
Wills are important for a variety of reasons, the greatest of which is to ensure that you decide how your estate is distributed to and among your loved ones. However, here are four more benefits to having a Will:
If you have minor or dependent children, it is critical to select a Guardian who you believe is fit and able to care for your children in their time of need. A Will is the most reliable way to select a Guardian to care for your child in the event of your death. If both parents die without appointing a guardian in a Will, the Court will choose the person who will care for your children.
Most parents, when asked, elect to establish Trusts in their Wills to benefit their children, which are administered by a Trustee. The assets are managed and distributed by the Trustee to the children in accordance to the wishes of the parents, as set forth in the Trust. The Trust then terminates at a point in time when the parent feels their child would be able to manage their own affairs. If parents die leaving assets and/or property to a minor child or children, without the establishment of a Trust, then the Court will step in and decide who should administer the property on behalf of the child or children. Once the child reaches the age of majority, the child will receive full control over the assets and or property. A Will is an excellent mechanism by which to create a Trust for the benefit of a child or children. Moreover, a Will is where a parent appoints a Trustee and describes the disposition of the Trust.
A personal representative ensures that your wishes, as contained in your Will, are carried out after your death. The Personal Representative collects and inventories all of the property and is responsible for making distributions in accordance with the Will. Most people choose a spouse, sibling or other close family member or trusted friend to act as Personal Representative.
Without a Will naming a Personal Representative, a Court will appoint an administrator to oversee the distribution of your property. Consequently, your Estate may be administered by a stranger who knows nothing of your wishes or intentions.
If you die without a Will, then the Court deems that you have died Intestate and imposes State created rules that govern the distribution of your estate. Generally, the spouse and children of the deceased are the first to share in the Estate. In Utah, spouses receive items considered as community property and children receive portions of separate property. Often times, these distributions are contrary to the wishes of the deceased and create strife between families. Also, without a Will, it is impossible to give gifts or property to close friends, in-laws, charities or other organizations. Worse yet, if there are no living blood relatives, the state confiscates all the property and it accrues to the benefit of the state. The best way to avoid the state’s intrusion into your personal affairs is to establish a valid Will. Don’t put off this important task.
If you’ve spent any time at all talking about estate planning, you’ve probably wondered why you would need a Will if you have a Trust. Most people are familiar with a Will (or “Last Will and Testament” to be fully formal), but many do not really know what a “Trust” is. Think of a Trust as being a special box into which you place your assets (bank accounts, stocks, your home, rental properties, etc.) The person you appoint to take care of the box is called the “Trustee”. This person is not the “Executor”. An Executor is appointed in a Will, approved by a court, and only has authority after you die. A Trustee generally does not need court approval, and can handle things during your lifetime and after your death. This is why it is sometimes called a “living” Trust.
There are many differences between a Will and a Trust, but the most basic differences are:
For most people, having a Trust is well worth the expense of setting one up a cost which is, by the way, generally far less expensive than a probate. It is customary (though not required) to name the same person as Trustee and as Executor, so that control of both Trust and non-Trust assets are centralized in one person.
So, why do you need both? Having a Will even if you have a Trust is like having a safety net. It is very common for people to accidentally leave something out of their Trust. The family home is a good example. People buy a new home, or refinance the existing one, and forget to title the property back to their Trust when they are finished. When the person dies, the house is not part of the Trust, so “who gets it” is decided by the Will. Ideally, the Will states that all assets pass to the Trust. This way, final distribution of assets still follows the plan laid out in the Trust. Without a Will, the State will decide who gets any assets that are not in the Trust. That may or may not be the people you wanted to have that property.
A good estate plan will always include a Will, even if it has a Trust. Regardless whether you decide to have one or both, you should always get help from a lawyer. In the long run, do it yourself estate planning usually results in more expense and unintended consequences.