YOU SHOULD KNOW ABOUT WILLS
The will is one of the most basic estate planning tools. Black’s Law Dictionary defines a will as “an
instrument by which a person makes a disposition of his or her real and personal property, to take effect after his or her
death.” In order to be valid, a will must be drafted and executed in accordance with the laws and formalities set forth
in state law. In addition, a will should be carefully created to fit the individual’s specific needs. If created properly,
a will avoids costs and complications for your heirs when you die. Besides providing instructions about gifts of your property—like
your home, car, investments, and jewelry—your will can provide instructions for payment of your debts, selection of
an executor for your estate, and appointment of a guardian for your children.
DISADVANTAGES OF PASSING ON WITHOUT A WILL
If you leave no will at
your passing (also referred to as “dying intestate”), you will have given up your right to decide who inherits
your property. Your property will be distributed according to state law. In other words.... if you don’t have a will
which you yourself have signed.... then the State of New Hampshire has one already written for you! It’s called the
“intestacy statute,” and this statute dictates how a person’s property is to be distributed if he or she
dies without a will. Of course, this may be quite different from your preferences. And without a will, you can't disinherit
heirs. If you leave no will, you also lose the opportunity to select a guardian for any minor children and an executor for
your estate. Court-appointed administrators and guardians may not be the family member or friend that you would have chosen
to handle your affairs and care for your children. Passing on without a will can result in more costly legal fees for your
surviving loved ones. Estate administration proceedings without a will may complicate and delay transfer of property to your
APPOINTING AN EXECUTOR
You should appoint an executor in your will. An executor locates heirs,
lists property, pays debts, and distributes property to your heirs. Most people choose a relative or trusted friend to serve
as their executor, although if you have a large or complicated estate, you may consider using a professional (such as a bank
or trust company) as your executor or co-executor. An executor should be someone who is familiar with managing property, financial
matters, and record-keeping. Before naming an executor, you should confirm that the person is willing to serve. Your lawyer
can help guide you in selecting the best executor.
APPOINTING A GUARDIAN
If you have children under
18, you should appoint a guardian in your will. Otherwise, if you and your spouse die at the same time without such an appointment,
a court will select a guardian to care for your children and manage their inheritance until they become adults. You can create
a trust to control the property transferred to your children. A trust is useful if you are concerned that the children may
lack the maturity to handle their inheritance after age 18. Your lawyer can help you to select a guardian and create a trust
in your will that protects your children and your wishes.
MAKING YOUR FUNERAL ARRANGEMENTS
You can include instructions for your funeral arrangements
in your will. If you do, you should also give a copy of the instructions to your executor or a family member or friend to
avoid delays when you die. You can also include instructions about gifts of your body organs to hospitals for research or
transplants. Such instructions for gifts of body organs can be noted on your driver’s license or a separate donor card
that you can carry in your wallet. Any wishes regarding organ donation should also be noted on your Health Care Power of Attorney,
which is discussed on this website, in the article on Advanced Directives.
REDUCING THE TAXES ON YOUR
Federal estate taxes may be deducted from your property before it is transferred to your heirs. A federal
estate tax applies if the value of your property exceeds an exempt amount which is set by federal law. Under the current tax law,
the exempt amount varies depending on the year of a person's death. Your lawyer can help you prepare
an estate plan that will reduce taxes. For example, your lawyer may suggest that you make gifts before you die to reduce taxes,
hold property in joint tenancy with your spouse, transfer ownership of life insurance policies to your spouse or heirs, or
use a trust arrangement. Your lawyer can also help you shift the tax responsibility among heirs if you would like some of
them to receive their shares without being taxed on it.
REDUCING PROBATE COSTS
After a person dies,
the will does not automatically take effect. Rather, it must be administered through the Probate Court, a process usually
referred to as being "probated." The decedent’s will must be presented to the Probate Court for administration.
The Executor named in the will must be formally appointed by the court and he or she must carry out the probate process with
the oversight of the court. This includes the filing of various forms with the court, and adherence to court procedures. Probate
costs include court fees, bond premiums and the fees of professionals who assist your executor with the administration of
your estate. Your lawyer can help you reduce probate costs with estate planning tools like joint ownership, lifetime gifts,
and living trusts. As discussed in the next article, "What You Need to Know About Estate Planning using a Living Trust,"
your lawyer can prepare a living trust in which you appoint a trustee to distribute your property when you die. Some estate
planning tools can help you reduce probate costs, but they may not lower your estate taxes.
Once you have a will in place, it may be revoked or amended at any time. Generally speaking, you may
need to change your will if you move to a new state, have a change in marital status, have a child, acquire substantial property,
or suffer the loss of a loved one. Tax law changes may also require a will update. It’s a good idea to read your will at least once a year to consider changes. You can make the changes
by writing a new will or by preparing an amendment to an existing will, which is called a codicil. A new will is best if there
are many changes. A codicil may be appropriate for a small change, but even still, a codicil must be made with the same formalities
as a new will, in terms of execution, witnessing, notarizing, and the like. Crossing-out or writing inserts onto your will
might invalidate it.
Your will should be kept in a safe place so that it can be promptly located when you die.
You may wish to have your lawyer keep the original to protect it from damage or loss. Although you are not required to give
your executor a copy of the will, you should tell both your executor and a trusted family member where your will is stored.
PREPARING YOUR WILL WITH A LAWYER
will lets you distribute your property according to your wishes. It is an opportunity to select an executor for your estate
and a guardian for your children. If you own any kind of property – a home, a car, bank accounts, stocks and bonds,
retirement benefits, jewelry, clothing, household goods, and so on.... or if you have any wishes or instructions which you
want to have honored after your decease, such as choosing a guardian for your children.... then a will is the "minimum"
legal document which you should have executed, as part of an estate plan. It is essential that your will be executed in such
a way that it accurately expresses your wishes, and also complies with the detailed state requirements for a valid will. Your
lawyer can also help you accomplish that. Your lawyer can help you carefully consider your options, and help you to reduce
estate taxes and probate costs to the greatest extent possible. Finally, through consultation with your lawyer, you can decide
if a "Living Trust" might be the right choice for you, as a will substitute. For more information on estate planning
using a Living Trust, please see our "Law and You" article on trusts. Back to Estate Planning Main Page
PLEASE NOTE: This article
provides general information. Laws develop over time and differ from state to state. This article does not provide legal advice
about specific legal problems. Most of all, this article is NOT a substitute for legal advice. Rather, it is intended to whet
your appetite for this topic, and give you some basic information. For more information about your particular situation, you
should seek out the advice of an attorney. Please give Attorney Rutter a call at any time, to schedule an appointment to begin
a discussion of YOUR estate planning needs!