Wills and Testaments
Wills are legally binding documents that state exactly what should happen in the event of a person’s death. Wills are meant to protect a person’s money, physical property, and Family. Many people only require basic wills, which can be created quickly and are very affordable. Creating a will sounds simple enough, but the truth of the matter is, there are many different ways to go about it, and many different types of wills
In a “Basic Will” or “Simple Will” (Statutory Wills), transfer of possession of goods and matters regarding life insurance payouts are covered. Any money in savings, checking, or other bank accounts is assigned to the person or people you chose. If minor children are involved, the you can also designate a guardian for the child or children. Information regarding the transfer or sale of houses owned by the will writer are also included in wills. Other items designated in wills include furniture, cars, jewelry, pets, collectables, clothing, and any other belongings.
Wills can be written if you are of legal age, which is eighteen in the United States, and of sound mind. Written wills can be drawn up by a lawyer, a notary public and a second party must witness the person’s signature in order to make it valid. In addition, the witness should not be someone who is receiving items from the will.
Wills must include detailed information regarding the person’s assets, the value of these assets, and to whom they should be transferred in case of death. Furthermore, married couples should have separate wills, as well as a joint will.
There is also another type of will called a “living will”. Living wills state exactly what a person wants to happen if he or she becomes incapacitated and must remain in a hospital or health care setting. Directions provided on living wills include whether or not the person wants to be placed on feeding tubes or if extraordinary resuscitation measures should be used. Living wills also state what should take place if the person should become brain dead. Living wills can be easily printed, notarized and kept close at hand in case of a medical event.
A “Pour-over Will” is used in conjunction with a Living Trust. It is like any other Will, except that its primary Beneficiary is the Testator’s Living Trust. A Pour-Over Will “pours” any property the decedent still owned at the time of death into a Trust. With this type of arrangement, property left through the Will must usually go through probate before it is placed into the Trust.
One of the purposes of the Pour-over Will is to direct that all assets that were not titled in the name of the Trustee of the Living Trust ultimately become part of the Trust and are disposed of pursuant to the terms of the Trust. A Pour-over Will controls only probate assets: those that are not in a Trust; not in joint tenancy; not being inherited by a surviving spouse; and not in an IRA or 401K.
Probate assets are usually titled in the name of the Testator only. However, probate assets can also be found in situations in which a mistake has been made, such as failing to name Beneficiaries for an IRA or 401K.
If one were to die with a Living Trust, but without a Pour-over Will, it might result in two distribution plans: one for the assets in the Trust, and another for the Probate assets outside of the Trust. Any property that was intentionally or accidentally left out of the Trust will not pass according to the provisions of the Trust, as the decedent probably desired, but will pass according to the state laws of intestate succession instead.
Whenever a Trust is used as part of your Estate Plan, it is essential to include a Pour-over Will in your Plan as well. This will ensure that the property which was not held in Trust or transferred in some other way will be caught by the Will and distributed as you intended.
A Holographic Will is a handwritten Will that is not witnessed. It must be signed, dated and written entirely in the Testator’s handwriting. Holographic wills are recognized in less than half of U.S. States.
Problems and complications with these types of wills are common. They often don’t contain certain standard provisions required by state law and are therefore vulnerable to issues and challenges during probate. In addition, although in some states no witnesses are required, this is rare. Generally, any unwitnessed Will is considered unreliable and doesn’t prevail in court.
A Holographic Will is usually created in a situation where the Testator believes death is imminent and no other Will exists. A Will written by a dying person who might no longer be of sound mind may be deemed invalid. Though generally, a court will presume that the Testator had enough mental capacity to create a Will unless evidence proves otherwise. Another reason for creating a Holographic Will is cost. Some people cannot or will not pay an attorney to create a Will and therefore, seek to write one on their own.
In most cases, for a Holographic Will to be valid, at least three competent witnesses must testify that they believe the Will was written entirely in the handwriting of the Testator and that the signature was also written in the handwriting of the Testator. In addition, at least one witness must testify that the Will was found after the Testator’s death among his/her valuable papers, in a safe-deposit box or other safe place, or that the Testator had left the Will with someone for safekeeping.
Oral Wills, Nuncupative Wills, Deathbed Wills
An Oral Will is spoken/oral, rather than written. This type of Will is usually made before witnesses. The Testator will say out loud to someone else how he/she wants his/her property and assets to be distributed after death.
A Nuncupative Will is an Oral Will that has at least two witnesses and meets specific statutory guidelines. There is a strong possibility of misunderstanding, error, or outright fraud in this type of situation. Therefore, few states recognize Nuncupative Wills outside of specific emergency situations, such as when the Testator is in immediate danger of dying. Some states recognize Nuncupative Wills made by individuals in the active armed forces during conflict.
States that do recognize Nuncupative Wills, do so only when they meet numerous restrictions. These restrictions include that the Testator dictate the Will orally in front of at least two witnesses; that the Will be committed to writing by someone other than the Testator, within a certain timeframe (determined by statute); and that it be properly notarized.
Nuncupative Wills may only specify the distribution of personal property and many state laws limit the amount of personal property that can be distributed by this type of Will. They cannot be used to distribute real property. Nor can they be used to revoke or make changes to any existing written Will.
Nuncupative Wills are also referred to as “Deathbed” Wills, since they are used when a person is faced with imminent death; usually from a terminal illness, during war, or before leaving for armed conflict.
Even when legally valid, they are often contested. The closer to death the Will is prepared and signed; the more likely it is that someone will claim the decedent was no longer competent at the time the Will was created or that someone was exercising undue influence or coercion over the Testator while creating the Will.
Wills for Couples: Reciprocal (Mirror) Wills, Joint Wills and Mutual Wills
Although some of these terms are often used interchangeably, it’s important to note that there are distinct differences between them:
- Reciprocal Wills – Individual wills by two people (usually spouses or civil partners) where they leave everything to each other; separate legal documents with the same or nearly the same contents. (Also called Mirror Wills).
- Joint Will – A will made jointly by two persons containing reciprocal provisions; a single legal document.
- Mutual Wills– Wills made by two persons (usually spouses or civil partners). If one Testator dies before the other, the surviving Party is bound by the arrangements of the Mutual Will and cannot change it.
Reciprocal Wills (Mirror Wills)
Reciprocal (Mirror) Wills provide for spouses or civil partners to pass their assets to one another In the event one dies before the other and to mutually agreed upon Beneficiaries should they both die at the same time. They allow couples to give identical bequests to the main Beneficiaries, while still providing them with the freedom and flexibility to make slight changes if they desire.
Most Reciprocal Wills for couples with children include a clause to deal with a common disaster situation. The clause contains a variation of the following wording: “All of my property to my spouse, if he/she survives me by at least 30 days. Otherwise, all to the children.” The use of 30 days as the timeframe is arbitrary. However, the period should be less than six months to avoid loss of the tax-free status of the property transfer to the surviving spouse.
After the death of one of the spouses or civil partners, the surviving party is free to change his/her will if he/she chooses to do so.
A Joint Will is a single Will that two people prepare together where each one leaves all their assets and property to the other. After one person dies, the surviving person cannot change the Will. If the surviving person creates a new, separate Will, the specifics from the Joint Will may still be upheld by a court of law.
Some Joint Wills include a stipulation for how the assets will be distributed after the second person dies.
Couples can encounter several issues and difficulties when choosing to draft a Joint Will, rather than separate wills. For example: if one spouse decides they want to make a change to the Will, they will not be able to do so without the consent of the other spouse; if one spouse solely owns an asset and wants to leave it to someone other than their mutual children, this can be problematic as well. Many attorneys discourage the use of these types of Wills.
Mutual Wills are two identical but separate wills, prepared by two people who name each other as their Beneficiary should one die before the other, and mutually agree upon other Beneficiaries after both of their deaths.
These types of Wills have a legal effect beyond that of so-called conventional Wills. Both wills contain an agreement that neither Testator will make any changes to their Will after the death of the other. Therefore, the surviving Mutual Testator is bound by the original arrangement and cannot change his/her Will.
People choose these types of Wills sometimes to create some protections. For example, if a wife has children from a previous marriage, she may want to ensure that parts of the estate are left to her children after the death of both Mutual Testators. Without the mutually binding nature of Mutual Wills, there would be nothing to stop her husband from changing his Will after her death and leaving her children out of the new Will.
No matter which type of will needs to be created, it also needs to be monitored and updated. At Franks & Roeder we make the entire process easy and are available to make updates to your will as needed. Your will needs to be updated when common life-changing events take place:
You should consider updating your will after any of the following events:
- You get married or enter into a close relationship.
- You get divorced.
- You have or adopt a child.
- You buy or sell a valuable item, like a piece of property.
- You change your mind about who you want to manage your estate or receive your assets.
If you wish to update your will, you can either add an amendment to your will or make a new will entirely. An amendment to your will, called a “codicil,” must be signed and dated in the presence of witnesses.
Since many people must go through this process just to add a postscript to their will, it sometimes makes more sense just to create a new will. That way, codicils will not end up contradicting material in the original draft of your will.