37 Things People “Know” about Wills that Aren’t Really So
1.“Only people with children and others who depend on them need wills.”
Even people with no dependents need wills if they have any property at all and want to determine who eventually receives it.
2.“Only wealthy people need wills.”
If you have any property at all, you need a will, even if your estate is modest, your heirs few, and your wishes simple.
3.“Only people with troublesome relatives need wills.”
Even family members with the best intentions can be confused as to what your wishes may have been in the absence of a will.
4.“When people dies with wills, the law usually distributes their property in about the same way they would have.”
The law distributes property according to a rigid plan. Spouses and children sometimes receive equal amounts regardless of need, and no provision is made for bequests to friends or charitable organizations.
5.“Couples who hold their property jointly with right of survivorship don’t need wills.”
Although joint ownership can be sensible and help reduce the expense and delay of probate, both spouses will typically still need wills. The reasons are numerous, and your attorney can review them with you.
6.“Only the wealthy or people without close relatives leave substantial bequest to charitable interests.”
More and more people with modest estates are discovering that they can make meaningful gifts to favorite charities through their estates and still provide generously for dependents and loved ones. This is especially true as estate taxes are less of a consideration after recent tax law changes.
7.“The laws on wills are pretty much alike throughout the United States.”
Laws that govern estate settlement vary considerably from state to state. That’s why you should review your will carefully when you move to another state and have an attorney in that state review it. Fortunately, if a will is validly executed under the laws of the state where the will is executed, it will usually be considered valid in the sate of residence at death.
8. “A will is the only method for disposing of property after death.”
You can make no plans and let the state distribute your property. Or you might create a trust with instructions for disposition of your property at death. Some choose to convert property titles to a joint ownership basis. Life insurance and retirement plans are typically distributed through beneficiary designations. Even if other methods are used, a will is still considered an important part of a complete plan.
9.“The law makes no distinction between real estate and other property.”
The law can differentiate sharply between the two. In some cased, a will that distributes land must be valid in the sate where the land lies, while the will distributing other property must be valid only in the sate where the person lives.
10.“A person must be of ‘sound mind and disposing memory’ to make a valid will.”
The courts have, at times, honored wills made by persons with failing faculties – if they had sufficient mental capacity to understand what they were doing for whom at the time they were doing it.
11.“Any person who has a good memory and is intelligent can make a valid will.”
Not if a person is not of legal age, or mental illness has rendered him or her incapable of making sound judgments.
12.“A will made by a person who is mentally and physically sound is valid regardless of its content.”
Not if she or he is laboring under “misapprehension of fact fraudulently induced” or subject to what the law call “undue influence” by another.
13.“You have to be at least 21 years old to make a valid will”
Most states set 18 as the minimum age.
14.“A person cannot totally disinherit a spouse without just cause.”
It can be done. But the surviving spouse can contest the will or file a claim for what, in some states, is a share that is established by law."
15.“One spouse always has the same rights to the other spouse’s estate.”
In some states, rights will vary depending on whether the couple has children born of their marriage.
16.“Once a will is made, nothing can change it except a new will.”
A will may be changed in several ways. A marriage or divorce subsequent to the making of a valid will may automatically grant or take away inheritance rights to or from a spouse or ex-spouse. Or changes in laws may alter the framework in which a will in interpreted. A codicil (amendment) added to your will can alter its provisions.
17.“Children are excluded from and inheritance if they are not mentions by name in the will.”
In most states, a child born after the date of the will receives what he or she would have inherited if there had been no will – the share the state law would normally provide should a parent die without a will.
18.“Witnesses must sign the will in the presence of the testator, but not in the presence of each other.”
In most states, witnesses must also sign in the presence of each other, and they must be aware that they are witnessing a person’s last will and testament.
19.“Witnesses must be told the contents of the will.”
This is not required.
20.“Witnesses must be at least age 21.”
Anyone can be a witness who is “credible” and “competent,” including children old enough to understand what is transpiring, although some states set a minimum age.
21.“It doesn’t matter whether or not witnesses are also beneficiaries of the will.”
An attesting witness who is a beneficiary may be ineligible to receive a legacy, unless there are enough other witnesses to prove the will without that witness.
22.“A will is the most effective way to leave life insurance proceeds and assets held in qualified retirement plans.”
Usually the proceeds of a life insurance policy or the remainder of retirement plans are distributed according to the terms of beneficiary designation forms completed by the owner of the policy or plan assets. If the estate of the owner is designated as beneficiary of the policy or plan, a will may then ultimately determine who receives the assets.
23.“A handwritten will, unwitnessed, cannot be valid.”
In some states such wills are held valid when the testator’s handwriting is generally know by friends and associates and can be identified by them.
24.“Oral wills are never valid.”
Such wills can sometimes be valid, but only under certain conditions – if the testator is dying or is a soldier on active duty or a sailor at sea, and if the oral will is made before three competent witnesses, one of whom puts it in writing soon after it is made.
25.“An oral will can always revoke a written will.”
In most states, an oral will can never revoke a written one.
26.“Because most people have estates smaller than amounts subject to state and federal taxes, it is a waste of time to consider planning to minimize these taxes.”
Even though the amount that can be left to heirs free of federal gift and estate taxes is significant and is scheduled to increase in coming years, the total value of your home, savings and other assets may now be higher than you suspect. Increases in investment values, insurance proceeds, retirement accounts, and inheritances may combine to unexpectedly cause your estate to be subject to federal and state estate taxes. Check with your advisors for current amounts that are exempt from taxation.
27.“All property of a married person receives the benefit of the marital deduction.”
Only property left directly to, or for the benefit of, a spouse in a properly drafted trust will qualify for the marital deduction.
28.“Nonprofit organizations named as beneficiaries in wills need only be identified by their popular, generally accepted names.”
They should be identified by their exact corporate, legal names and addresses. If this is not the case, there can be confusion, possibly leading to lengthy and expensive court procedures before the charity receives the intended legacy.
29.“A personal representative need not be named for a small estate.”
One should be named since it may be desirable to waive the requirement for her or him to make bond, an expense you may consider unnecessary.
30.“You should not name your husband or wife to administer your estate.”
This can be practical when the widow or widower is healthy and willing to serve. Unfortunately, you have no way of knowing now if that will be the case. It may therefore be advisable to name another person or a trust company as the alternate if necessary.
31.“When a will contains a trust, it is best to spell out the terms exactly and narrowly define trustees’ powers.”
It is usually best to give the trustees broad powers for investment and reinvestment of estate assets in order to take full advantage of their abilities.
32.“A good will, professionally drafted, rarely needs revision.”
Even the best wills need revision because conditions change. Children grow up and beneficiaries and personal representatives die, move away, or become estranged. There can be fluctuation in wealth. Tax Laws can be amended and charitable preferences may change. A will should therefore be reviewed periodically.
33.“When you want to care for your surviving spouse ad include charitable gifts, it is usually best to leave everything to your spouse, who can leave any balance to the organization.”
34.“The best and most preferred way to be a philanthropist is through your will.”
The preferred way for you to give depends on many personal factors. Giving by will is convenient for many, but other methods should also be explored in order to maximize tax and other benefits.
35.“If you don’t have a will, your estate is unplanned.”
Rather than the choice of planning vehicles, it’s the care taken that means the difference between meeting a family’s needs and leaving and estate in disarray. A will is often considered the “cornerstone” of an estate plan, but it is possible for other vehicles, such as living trusts, to handle much estate distribution.
36.“Most of the important points about wills can be covered in a small list like this.”
The laws governing wills in just one state would fill several large volumes. That’s why it is vital that you consult your attorney.
37.“It is expensive to have an attorney draw up your will and often hard to find out just how much it will cost.”
It’s as easy as asking, and attorneys don’t mind being asked. The fee for their work and advice is often a bargain when measured in terms of the taxes and other expenses a will can save your heirs.
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