How a Will Actually Works

In this second part of our series on Wills, we examine how Wills actually work. We begin by discussing the actors in a Will, including who they are and what they do. Then we examine several different types of Wills and learn why you should only implement one of them. Finally, we examine some of the common clauses that are added to a Will to accomplish specific things desired by the Will maker.

Actors In Wills

A Will is a legal document in which you describe who will own your property upon your death. As well, the Will is where you address certain other considerations like who should be the guardian for any minor children and whether there should be a trustee appointed to manage the assets designated to minor children. There are several important people who are identified in the Will and charged with implementing your wishes.

Executor/Executrix: is the person or commercial entity (bank, trust company, etc.) named in a Will and charged with the responsibility to collect the deceased person’s assets, see that the deceased person’s debts, including taxes, are paid, and to distribute any remaining property to the person/s named as beneficiary/ies in the Will. Think of the Executor as the business manager of the estate.

Trustee: is a person or bank that holds property for the benefit of others (the “beneficiary” of the trust).  A Will can create a trust at your death to hold money and property for a minor child or for someone you feel would not be able to manage their own money. A trust can last (subject to some limitations) as long as you want, providing a wide variety of benefits and protections to the trust beneficiaries.  Any person, of any age, can be the beneficiary of a trust.

Guardian: is who looks after the personal care and custody of a child below age 18 (a “minor”) or an adult who is incapacitated. Guardianships for children generally last only so long as the child is below age 18. In the absence of a Guardianship clause in the Will, the probate court will select the guardian for any minor children or incapacitated adults who were in your charge.

You can name the same person to be Executor, Trustee, and Guardian, or you can divide the positions among several people based on their qualifications. You should also select alternates for each position, in case your first choice is unable to serve for any reason. These people will serve without bond (to save cost) unless you indicate otherwise. Therefore, the person/s you choose should be trustworthy.

Types of Wills

Many people do not realize that there are several types of Wills. While all are technically valid in at least some US states, remember that a Will needs to be presented to a judge during the probate process.  Consequently, the Will needs to be understandable and clear. An unclear Will may result in part or all of it being invalidated.

Statutory: A Statutory Will is probably the one you picture when thinking about Wills. This is an official document, created by an Attorney, and signed in front of witnesses to give it validity. Statutory Wills are your best bet because they will usually employ standard language to reduce confusion and will be written by an experienced attorney who makes sure the document is correct.

Holographic: A Holographic Will is one that has been handwritten. Most states allow you to write your own Will without the cost and hassle of hiring an attorney. The requirements vary from state to state, but most want a Holographic Will to be signed and dated.  Some states also require that the Will signing be witnessed by other parties. Holographic Wills are not ideal because they are easier to challenge. Some heirs may dispute the meaning of part of a handwritten Will.  In the absence of witnesses, there also may be questions as to whether the Will was actually written by the deceased. Even if there is no dispute among heirs, it is entirely possible that your intentions are misinterpreted or unclear. In such a case the probate court will have to attempt to determine what you meant. While a handwritten Will provides some guidance for your last wishes, it is better to just spend the money and have an attorney do the typing.

Nuncupative: This is someone making an oral, dying declaration, usually in front of witnesses, about their wishes. This type of Will is not accepted in many states and has heavy restrictions by the ones who do. It is also the easiest to contest as it is inherently subject to the recollections of the witnesses (turning it into a very somber game of telephone).

Common Clauses in Wills

While there are many important clauses in a Will, there are only a few that are important and interesting. I have attempted to focus on just a few of the latter.

Bequest: A bequest sends a specific piece of property to someone (ex: Bob gets my pickup truck). This is useful for certain sentimental items (family heirloom or treasured collectible) or something that needs specific care (a pet or classic auto). Bequests are also a great way to honor a close friend or family member that you have a special connection. It makes your Will more personal and more meaningful.

Residual: A residual clause is a catch-all item, anything not specifically given as a bequest, or any bequest that could not be fulfilled, will be given to this person/s (ex: Bob gets my pickup truck, the residual of my estate goes to my children, Sam and Sally).

No-contest: While we like to think that family comes together during a tragedy, the prospect of a potential inheritance can too often lead to greed and bickering.  This can make the settlement of your estate a long and contentious affair. A no-contest clause attempts to address this potential problem by disinheriting anyone who attempts to bring a legal challenge against your Will.

While this article is focused on Wills in general, there can be a lot of variances in the law from state to state.  For this reason, we continue to stress that it is best to consult with an attorney who is well-versed in the laws of your state.

Is your Will up to date or do you have questions about your overall Estate Planning?  We would be happy to visit with you.  Simply use the links below to schedule a visit with either Galen or Steve.

Click here to see part 1, Studies Show that Most Americans Don’t Have a Will.

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