Understanding the Basics of a Last Will and Testament
Estate planning should begin with a Last Will and Testament. This legally-binding document is necessary to protect your wishes and interests concerning your estate after you have passed away. A Last Will and Testament allows family members to know your final instructions and helps avoid legal disputes and other issues. Without a will, the future of your assets after you die will be determined by your state’s law instead of your personal wishes.
The basic information you should begin with includes:
- the components of a will
- the reason for choosing an executor
- the process for assigning beneficiaries
- the selection of guardians for minor children (if applicable)
What’s in a Will?
A legally-binding Last Will and Testament contains these main components:
- Beneficiaries and Assets
- The Residuary Clause
- Appointing Guardians
The declaration states the intentions of the person writing the will (also called the testator), including basic identifying details (name, address, etc.) and a legal statement that the will is legally binding and revokes other documents.
Just as your vehicle cannot (yet) drive itself from Point A to Point B, nothing can happen with the Last Will and Testament without someone “at the wheel.” The executor is the person who is responsible for carrying out the testator’s wishes in the will. They disperse the assets, handle any debts, and work with the probate court to ensure the legal side of the process is covered.
Selecting an executor is a vital part of establishing a solid estate plan. As the executor is responsible for handling the personal and legal facets of a will, the appointed person should be someone you trust to oversee sensitive tasks.
If your will does not specifically name an executor, the probate court will appoint someone to preside over your estate. One of your first tasks when setting up your will should be to name an executor.
Beneficiaries and Assets
Because the primary purpose of a Last Will and Testament is to settle and disperse your assets, naming your beneficiaries is an important part of the document. As the testator, you may name any person or organization as your beneficiaries. The “Bequest” section is absolutely vital to the will because it lays out how the testator wishes to disperse their estate and which assets go to which beneficiary.
You are also free to distribute your assets and property however you desire. For example, you can designate specific items to specific beneficiaries — your child may get your furniture while your sister gets your collection of pearls. You may also choose to divide your estate by percentages — your spouse receives 75% of the estate and the remaining 25% goes to your brother.
Assets like money, stocks, and bonds are easy enough to divide among the named beneficiaries. Real property (homes, vehicles, land) is not complicated unless you decide to leave your children a percentage of your home or property. It will be helpful to provide the executor with additional instructions on how your wishes should be carried out (i.e., sell property and disperse funds accordingly).
The Residuary Clause
When putting together your will, you should strongly consider including a residuary clause for any property, assets, and items that are not specifically mentioned in the will. That way, if you forgot about an asset, or you gain an asset after you execute the will, the residuary clause acts like a catch-all, ensuring these assets get divided as you wish. It will help your executor properly delegate portions of the estate not explicitly identified and alleviate any potential disputes among your loved ones.
This part of the Last Will and Testament is only necessary if you have underage children. Even if you think your children will be adults by the time you pass away, you should still take time to carefully select and appoint guardians for your children now.
This is a critical decision that should be carefully weighed. The legal guardian has control over both your child and any part of the estate left to your child (meaning any money or property) until legal adulthood.
Estate Document Necessities
Even though you will customize your Last Will and Testament to your specifications, there are certain legal necessities for any estate document. The testator must be a legal adult (18 years old and older) and of sound mind. In other words, the person making the will should fully understand what they are doing. The testator must sign the will in front of a minimum of two witnesses.
A will is not considered legally valid if the testator signs the document under any threats or with ill intentions. For example, if a family member pressures you into changing your will for their gain, or if you are threatened with harm, a court will not enforce it.
You may also consider creating a Self-Proving Affidavit. This legally-binding document verifies the signatures of all parties (testator and both witnesses) and is signed before a notary. This will speed things along in probate court when signatures have to be verified.
Putting the Document Into Action
Even though you plan your will before your death, nothing is filed until you pass away. At that point, the executor (or another responsible party) takes the will to probate court for approval. If there is no Self-Proving Affidavit, then the witnesses’ signatures must be verified before anything else can happen. The executor is also officially appointed during this time and can begin their duties.
Who Needs a Will?
The short answer is everyone needs a will. Even if you do not have substantial assets or property to distribute, a will covers more than just distribution of things to beneficiaries. Your will can include funeral instructions, legal guardian appointments, and other requests you may have that do not deal with dividing up assets or property. Additionally, if you do own property and die without creating a will, the state takes charge of your estate and decides what happens to your assets.
Do I Need a Lawyer to Prepare My Will?
You can prepare a personalized, legally-binding Last Will and Testament without using an attorney. Simply bequeathing specific assets to certain people and making sure your children are taken care of by the people you want to take care of them is not overly complex and can be done through online services.
You may need to seek legal counsel when drawing up a will if you have a sizable estate. The government does not tax an inheritance until it reaches a significant amount (the amount periodically changes, but is always in the millions.) This is where it can become more complex.
Creating Your Estate Plan
An estate plan is more than just creating a will. A will is a great place to start, but there are other important considerations, such as a Living Will, a Power of Attorney, an Advance Directive, and a Living Trust. These documents cover potential situations before and after death and all help ensure your wishes are carried out. If you want more information on these other components of estate plans, keep reading through our articles to shed some light on each part.
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