Creating A Will
Updated for January, 2022
We spend so much time and effort planning for life that we tend to postpone planning for the inevitable, but, like it or not, death is certain. Thinking about our own mortality isn’t something anyone enjoys. Most of us avoid it, and by doing so, may end up putting off deciding what happens to our wealth and assets after we die. Creating a will is one of the best ways to ensure your legacy lives on through friends or family.
Table of Contents
- What Is A Will?
- Why Is Creating A Will Important?
- Do-It-Yourself vs Hiring An Attorney
- Online Options for Creating a Will
- Hiring An Attorney
- What Do I Include In My Will?
- What Is A Revocable Living Trust?
- Estate and Inheritance Tax
- What Happens To My Debts When I Die?
- Contesting A Will
- Making Changes
If you haven’t taken the time to prepare a will, you’re not alone. AARP found that two out of every five Americans over the age of 45 don’t have a will. And a RocketLawyer.com study found 50% of people with children don’t have a will and no legal plan on who will take care of the kids if they are no longer here. It’s wise to not be counted among those statistics.
If the thought of preparing a will has crossed your mind, but you are just not sure how to get started, then hopefully the information contained in this article can help.
Making a plan can save your loved ones from the unnecessary burden of trying to determine your intentions and desires all while mourning your death.
Do-It-Yourself vs Hiring an Attorney: Options for Creating a Will
There’s no way around it, creating a will takes some time and effort; but it’s worth the investment. Having a will allows you to decide who will receive the possessions you hold dear – from the vacation home to the savings account to your mother’s china. It’s one of the few things you can control after death. And making a plan can save your loved ones from the unnecessary burden of trying to determine your intentions and desires all while mourning your death.
While it is true you don’t have to have an attorney to prepare your will, most experts recommend it. Deciding to jot down your wishes on a piece of notebook paper, will, in some states and under certain situations, suffice. In states that permit a handwritten will (also called a holographic will), it must be written entirely in your handwriting and someone may have to verify the handwriting is indeed yours.
States that currently recognize some form of holographic wills are:
- New Jersey
- North Carolina
- North Dakota
- South Dakota
- West Virginia
But again, even these states have specific requirements on what makes a handwritten will binding, and failure to follow the strict requirements can cause the will to be invalid. So, if you want to have a rock solid, iron-clad plan for your estate, it’s best to have a formal document prepared according to the provisions of your state law.
Consumer Reports cautions the websites are best-suited for people whose needs are simple – like someone who wants to leave everything to his or her spouse.
Online Options for Creating a Will
There are other ways to “do-it-yourself” in creating a will. There are numerous websites that provide a template for you to fill out. If you do an internet search for “ways to create a will online,” several sites come up that allow you to fill out a standardized document, download and print it for free. A problem with these forms may be the templates are outdated and do not conform to your state laws on what is valid or may be so standardized they don’t even cover your basic needs.
There are other websites and software that assemble a will for you and can tailor the document to conform to the laws of the state you live in.
Legal Zoom says it has completed over a million and a half wills for people. For a basic document, you’ll be charged a flat fee of $69. The cost can go up to $150 if you select a will and some legal assistance with affiliated legal counsel. The website makes you fill out a questionnaire and then does what it calls a “Peace of Mind Review,” to make sure everything is complete. Legal Zoom double checks for punctuation, grammar and personal information about yourself and the state where you reside. It compiles a will for you and then sends you a digital copy for you to execute.
Rocket Lawyer is similar to Legal Zoom in how it prepares a will for you. The site walks you through a guided interview to garner information to prepare your will. For around $39 a month, you can have a membership to Rocket Lawyer that offers additional legal assistance or documents you may need.
Nolo offers Quicken WillMaker Plus software through its site, starting at $69. You purchase the software, download it and then the software will walk you through the will-making process. It comes with a user-friendly legal manual to help answer some of your questions.
Consumer Reports put all three will drafting services to the test. Its experts found that using any of the three websites is generally better than writing up your own will or not having one at all, but none of them will meet all your needs as well as hiring an attorney. Consumer Reports cautions the websites are best-suited for people whose needs are simple – like someone who wants to leave everything to his or her spouse.
Regardless of what it’s written on or how it’s prepared, your will still has to be dated, signed and, in most states, have at least two witnesses. Witnesses should also not be beneficiaries under the will, since that may be construed as a conflict of interest.
A qualified and well-trained estate planning attorney will be knowledgeable in the appropriate area of the law and can prepare a will specific to your wishes and needs.
Hiring an Attorney
Working with a qualified attorney in creating a will may cost more money than online services, but it allows you to obtain useful and important information through a face-to-face consultation with a legal professional. A qualified and well-trained estate planning attorney will be knowledgeable in the appropriate area of the law and will consider your specific wishes and needs when creating a will. Do-it-yourself forms can’t necessarily offer that can kind of peace of mind. If you need help finding an estate planning attorney, ask your friends or loved ones for advice or recommendations. The American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys are also good resources for finding help.
If you are a parent or the legal guardian of grandchildren or an adult relative or child with special needs or other limitations, you will need to appoint someone to care for them after your death.
What Do I Include in My Will?
After you’ve decided how to prepare your will, the next step is to get started. It’s important to first take stock of your assets – personal and real property, bank accounts, credit card accounts, investment accounts, retirement funds. Make a list that you can give to your estate planner. It’s important to note if you’re married that you and your spouse should make separate wills. Anything that you own jointly with another individual will pass by operation of law automatically to the surviving spouse at your death. Assets that are in your individual name are included in your estate and are the ones that you should focus on in planning your will.
Once you’ve listed your assets, you must decide who gets what. You may want your children to get everything or you may decide your church, favorite charity or close friend is worthy of a portion of your estate. Whatever your wishes, this is the point where you make that clear – so give it careful consideration.
Family heirlooms and personal effects of sentimental value are often as important to individuals as the investment and cash accounts they might own. A 2012 survey conducted by Allianz Life Insurance found 86% of baby boomers and 74% of all Americans over the age of 72 felt that keeping their family history alive to be of the upmost importance. Oftentimes, who gets great grandma’s silver pieces can be the biggest source of conflict among heirs. In order to avoid that, discuss with your heirs who gets what after your death. Make a list of those things with the appropriate named person and include it with your will. It’s important to be specific. If you simply put that you want your car to go to a particular grandson, but you have two cars and don’t specify which one – that can cause unnecessary confusion and bitter feelings.
If you are a parent or the legal guardian of grandchildren or an adult relative or child with special needs or other limitations, you will need to appoint someone to care for them after your death. If you fail to appoint a guardian, one could be required to be appointed by the court. Once you’ve decided who that person or persons will be, talk it over with them. You will want to be sure they are willing to serve as the guardian in your place. It’s not unusual to appoint separate guardians; one for the individual and one for the assets to be used for their care. This helps ensure the money or property you have left to care financially for them is spent properly and within your guidelines.
The next thing you must do is chose an executor. This is a person who you trust – one you know will carry out your wishes regardless of the advice being given by other family members. The executor may also be a beneficiary of the estate. Whoever you chose, discuss it with that person and make sure he or she is willing and capable to serve in the role.
Once the will is prepared and properly executed, store it in a safe place. Make sure your executor knows where the will is and how to get access to it when the time comes.
When you die, your alternative trustee distributes the property to your beneficiaries under the terms you’ve set in place in the trust.
What Is a Revocable Living Trust?
Unlike a will that takes effect when you die, a revocable living trust is a written agreement that becomes effective while you are still alive. It creates a trust to hold your property for you or your family and typically involves three parties: the trust creator, the trustee(s) and the beneficiaries.
The trust becomes the owner of any property or assets you place in it and titles and deeds will have to be changed and transferred to reflect that. A trustee is appointed to manage the property and the law allows you to name yourself to the position. Regardless of who you choose to be a trustee, you retain the right to manage the property and you may change anything you want at any time. When you die, your alternative trustee distributes the property to your beneficiaries under the terms you’ve set in place in the trust. The alternative trustee can also take over the trust for you if you become disabled, or, in some way, unable to continue overseeing it.
According to the American Bar Association, there are some disadvantages to a living trust. For starters, the cost for creating one is higher than a making a will and you may be regularly taxed on it at the federal or state level. You can’t name legal guardians for children, grandchildren or dependents. You may also have problems transferring some titles into your trust and for things that require insurance, you may have a hard time insuring them since you technically don’t own them anymore.
Living trusts are a way to lay out your instructions for who gets what and keep the bulk of your estate from being processed through the court system. But experts say even with a living trust, a will is still necessary.
Estate and Inheritance Tax
Paying tax doesn’t always stop when you die. A federal estate tax is required on estates worth more than five million dollars for a single person and more than ten million dollars for a couple. According to the Joint Committee on Taxation, the federal estate tax is paid by only .2% of Americans – roughly two out of every 1,000 deaths. The tax can top out at 40%, but the Tax Policy Center puts the average tax taken from estates by the federal government at around 17%. But if you are in that .2%, that can still become a large deduction in the amount that’s left to your heirs.
Some states impose their own estate tax for wealthier individuals. Currently, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington and Washington, DC all have their own estate tax. It’s important that you check with an attorney to see if or how it will affect you.
One other tax to consider when estate planning is the inheritance tax. Currently, Kentucky, Iowa, Maryland, Nebraska, New Jersey and Pennsylvania impose an inheritance tax, which can run between 10% and 16%. Unlike an estate tax that comes out of the overall estate, an inheritance tax is paid by an heir who lives in one of those six states on property and/or money left to them.
If there aren’t enough assets in the estate to satisfy the debt, the estate is considered insolvent and often an accommodation will have to be made by the creditor.
What Happens to My Debts When I Die?
It’s not unusual for someone to have debt at the time of their death. So, what happens to it? Depending upon the type of debt, it could be paid with the assets of your estate through the probate process if the creditor is known to the executor or a valid and timely claim is filed by the creditor in probate. The executor is responsible for determining all of the testator’s creditors and satisfying the valid claims with available assets of the estate. If there aren’t enough assets in the estate to satisfy the debt, the estate is considered insolvent and often an accommodation will have to be made by the creditor.
Some states, though, have community property laws. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin all have community property laws. That means any assets and debts one spouse acquires after the beginning of a marriage belongs to the other spouse too. For example, if you buy a car and the loan is only in your name, if you die and the loan is not repaid, your spouse will be responsible for taking care of it.
Two additional ways a will can be contested are if the document was not executed with the formalities of the law of the governing state or if proof can be shown the testator was not mentally capable of making decisions about their estate at the time it was signed.
Contesting A Will
After a person dies and their will is submitted to the court for acceptance to probate, other individuals who disagree with the terms of the will or the very existence of a will may contest the acceptance by the court of the will. It can take a considerable amount of time and money to sustain and succeed in an action to challenge a will. A case contesting a will is typically based upon one or more of four primary legal theories.
Claims can be based upon a theory of undue influence or extreme pressure placed on the testator in the writing of the will. If the decedent was tricked into signing a will they thought was another document, there could be a basis for claiming fraud. Two additional ways a will can be contested are if the document was not executed with the formalities of the law of the governing state or if proof can be shown the testator was not mentally capable of making decisions about their estate at the time it was signed.
Even after your will is prepared and properly executed, things will change. Maybe someone you’ve included as a beneficiary passes away before you, your marital status changes or an account you desire to leave to someone no longer exists. The laws governing wills and estates can change too. So, it’s important to review the document every couple of years to make sure it’s still accurate, and if it isn’t get the proper changes made.
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