A legal will can be written by any adult of sound mind and judgment. This person is known as the testator. He or she specifies which beneficiaries will inherit certain assets and names the personal representative to administer the estate. Sometimes a will gives instructions on how to set up a trust or to dispose of the testator’s remains.
Making a will is an important undertaking. It is a formal expression of your wishes concerning your assets and your family. When a will is drafted and executed properly, it not only allows you to designate who receives the property you own upon your death, but also how that property is to be received. Property can be received directly, or it can be kept in a trust for the benefit of your heirs. A trust permits you to retain some control over the property beyond your lifetime. A will can also determine who manages any trusts you might have established.
Without a legal will, the laws of intestacy dictate the distribution of your assets. That means the state, not you or your heirs, determines the distribution of your property. The law has been written to give general guidelines that apply to most people, but it does not reflect an individual’s unique familial situation or preference.
Failure to create a valid will can result in property going to unintended individuals. Regardless of wealth or circumstances, it is important to develop an estate plan that specifies your wishes clearly; a will is perhaps the most common tool used to codify these wishes. However, since a will is subject to probate, you may wish to use certain trusts to direct your assets upon death.
You can make changes to your will when needed, and may be able to do so with a simple codicil. It is particularly important to update your will after a marriage or divorce to ensure your will still reflects your wishes.
A living will, also known as an advance directive, is a legal document that articulates a person’s desires regarding medical treatment should they become disabled. Making a living will and authorizing power of attorney are two important steps during the incapacity planning process.
What is an Estate? Do I have one?
Yes, you have an estate. Your Estate is basically the property you own.
What is Estate Planning?
When is the right time for me to think about estate planning?
You should think about estate planning after any major life changing event: a marriage, divorce, birth of a child, or change in employment. You should also rewrite your estate plan if it has been more than seven years since you last revised your plan.
When should you change your estate plan?
After a divorce or marriage, the birth of children or grandchildren, relocation, or a change in financial circumstances. Additionally after a change in the code, such as the 1997 Taxpayer Relief Act which changed over 800 sections of code.
Who should have an estate plan, will or trust?
Everyone! There is an unfortunate, widespread misconception that only the wealthy need an Estate Plan. In fact, an Estate Plan is for anyone who wishes to provide for his or her survivors. If you pass away without a will or other Estate Plan, the laws of the state take over, and these laws may not reflect your wishes or provide for the ones you love.
Why is it important to use an estate planning professional to draft a will?
When is it too late to draft a new will or other estate planning document?
To draft a will you must have testamentary capacity, which means an ability to understand what it means to create a will, what property you own, who would naturally be your beneficiaries, and the terms of the document when you sign.