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When someone has been training and working in a profession for many years, it becomes very easy for them to assume that everyone else also understands the basics of their field. An auto mechanic might think it is common knowledge that a car’s oil should be changed regularly and what would happen if it did not. The electrician may assume that everyone knows that a proper ground connection is necessary when replacing an outlet or fixture. Unfortunately, estate planning attorneys and financial planning professionals are no different.
It is all too easy to assume that our clients know what we consider basic knowledge about wills – such as what a will is and why it is needed; what happens to your estate after your death if you do not have a will; If the will can help you if you lose your mental capacity; if you can or should write your will; And why do so many people create a revocable living trust in addition to a will.
I wrote this article to help readers answer these basic questions and organize their thoughts before choosing to see an attorney and how to avoid it Estate planning Errors and false assumptions.
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What is a will, and why is it needed?
A will is a legal document that sets out a plan for how individually owned assets will pass upon a person’s death. A will has no effect on any assets you own jointly with someone else or held in a trust you have established. Unless the beneficiary you have named for the insurance policy, 401(k), Irish Republican Army or similar ascendants also pass away, the will has no effect on the specified beneficiaries. So, if your will says, “I leave everything to my wife,” but you completed a 401(k) beneficiary designation at work several years ago and left your retirement account to your daughter, she, not your spouse, will receive those benefits.
Therefore, it is important to review all beneficiary designations periodically to ensure that your plans are implemented as you wish. Further, the will has no effect on any accounts or estates designated for payment upon death or transfer upon death under the laws of your state.
Your assets will not be legally transferred until your executor, with the assistance of an attorney, properly brings your will before a probate judge in state court after your death. By submitting your will for a probate, your executor is effectively asking the judge to agree that he is responsible and qualified to distribute your assets under its terms and that your will is valid under the laws of your state.
If your will is determined to be invalid because it did not follow the law or was the result of undue influence, it can be treated as if you had no will at all. If you die intestate, the court orders that your estate pass to your heirs under state laws of intestate succession.
Most people would assume that your spouse would receive your property if you died intestate, but some states require that your children receive a portion of your property. Properly drafted and executed clauses will trump intestate laws, provided the probate is accepted in due course. Some states require the bequest to be accepted into a will within six months after the person’s death, while other states have no time restrictions.
Because your will only becomes effective after your death and after it has been accepted into the will, this will is not effective when planning for incapacity. Many clients without a will use a durable power of attorney (DPOA) that gives a family member, as agent, the legal authority to act in place of the client if he or she is unable to act independently.
After you file a DPOA with your bank or other company that has custody or control of your money, your agent has the authority to write checks, withdraw funds, and enter into certain account agreements in the same way you do now. A DPOA is revocable, but it is only supposed to be in effect until you give notice of its revocation. Other clients use a revocable living credit when planning for possible default.
Should I write my own will?
Wills are best drawn up by lawyers, but they don’t have to be. Requirements for creating a valid will vary by state. Most states allow you to write your will. However, it is very important to understand all the legal requirements in your state. The courts will strictly enforce the law after your death. So, when your will has been verified, it is too late to fix any technical errors or make your intentions clear.
If you’re trying to make your will yourself, you should research carefully and understand the legal rules for the form and implementation of a will under your state’s laws, since each state has different rules.
For example, in Louisiana, a notary can prepare a will, or you can write your own if you strictly follow the requirements of the will. Olographic certificate. A court will only validate an ollographic will if it is entirely in your handwriting, dated, and signed at the end. There have been many reported cases of a disgruntled heir bringing in a handwriting expert to testify that the will purportedly was not fully written and not properly signed.
Usually, errors in a will form are not discovered until after death, when it is too late to correct any errors and the court is likely to determine that you died intestate.
An oligarchic will validly created in Louisiana may be valid in another state even if that state does not have similar provisions for handwritten wills, but validating a will requires a probate judge in another state to apply Louisiana law. Applying unfamiliar laws often leads to inconsistent results.
Many people move to warmer climates when they retire or move closer to their children or families as they get older. If you have a valid will under the laws of a state, you should review any estate planning documents, and carefully check that your will complies with the laws of the state where you ultimately reside to avoid potential difficulties and legal expenses for your heirs.
For example, all states have strict rules about how a will can be testified. Some states allow a will to be “self proof”, when properly notarized, which means that a will can be proven at death without the need to locate witnesses. If your will can’t prove itself properly, your executor may have to locate witnesses at that time. Also, if your will is not properly attested, it may be invalid, and it may be determined that you died intestate.
Why do many people create a revocable living trust in addition to a will?
Aisha is revocable trust It is a popular estate planning tool that avoids probate and helps plan for potential incapacity. When you create a revocable trust and properly reclaim your property so that it becomes an asset of the trust, you avoid a bequest because the property is no longer individually owned. The trustee who succeeds you simply distributes the trust property upon death to the ultimate beneficiaries of the trust either directly or in further trust, according to the terms of the trust agreement.
Clients usually act as their own custodian and hold the trust property for their own benefit when the fund is established and financed, so the practical relationship to their property does not change. In the event of incapacity, provisions are made for the heir trustee to take care of the fiduciary property still held for the benefit of the client.
The use of a revocable living trust does not completely negate the need for a simple will. If all of your assets are properly owned in your trust or intestate, and all of the beneficiaries of your insurance policies, retirement plans, and similar assets are living, then there is no need for a will.
However, a simple will, often called a “flowing will”, is recommended. A flowing will provides that, upon completion of the will, any individually owned property (due to failure of deposit in the trust or failure to meet conditions for designating a beneficiary or joint ownership) passes into your trust and not by dishonesty.
There are many reasons why you may avoid or put off your estate planning. I named a few of them in a previous column, Don’t let these all too common estate planning excuses get in your way. Consider this article a sequel.
Don’t let a basic understanding of estate planning and faulty assumptions be another excuse. You can create your own will and use beneficiary designations, co-tenancy, and paid-at-death forms of do-it-yourself estate planning. But, if you have the time to plan carefully and decide how you want your assets to pass, it’s best to hire an attorney who understands your state’s laws, is trained to spot potential issues and can advise you on the various rules regarding how assets are left at your death.
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