What is a Last Will and Testament?
A Last Will and Testament “Will” is a document that describes how you want your assets distributed after death. By making a Will, you can decide who will receive your assets, how much they will receive, and when they receive it. A Will allows you to choose a personal representative/executor and appoint a guardian for any minor children. A Will has no effect during your lifetime. Only upon death does a Will become effective. Additionally, Wills do NOT transfer property upon death. Any real property where the owner (or owners) have passed away must go through probate to transfer the title to the named personal representative/executor.
Does a Will avoid Probate?
It depends on the asset! If it is real property, the answer is NO. When a couple owns property (either outright or mortgaged) as Joint Tenants and one of the spouses passes away, then the surviving spouse will have complete and immediate ownership of the property without probate. This is called “Joint Tenancy with Full Rights of Survivorship”. When the surviving spouse passes away or if the couple passes away at the same time, the property must go through probate before it can be distributed...even if they have a Will! Remember, a Will takes effect after death. Obviously, after both spouses pass away, they cannot sign the deed over to the personal representative/ executor. And if they cannot sign the deed, probate is required because it is the only way to transfer the title after death.
The following assets are not subject to probate as long as the named beneficiary is alive, over the age of eighteen (18) and competent: bank accounts, brokerage accounts, life insurance policies and retirement accounts (Pensions, 401(k), IRA (Individual Retirement Accounts), Annuities, etc.). However, many assets such as real property, stocks, and accounts with improper or incomplete beneficiary designations may be subject to probate.
Who will be in charge of distributing my assets?
The personal representative, also known as an “executor”, handles the business affairs and distribution of the estate after your death. The personal representative is usually a trusted friend or family member. A personal representative locates the Will after your death; publishes notice in the newspaper to inform potential heirs and creditors about the probate hearing; files an inventory and appraisal of the property; manages the property during the probate process; pays any creditors, taxes, and fees; distributes the assets to the beneficiaries; and prepares a final accounting. Before selecting a personal representative, the responsibilities need to be discussed with the individual or couple to see if they are willing and able to perform these duties. It is also a good idea to name an alternate personal representative if, for any reason, the first choice cannot serve.
Can I control where my assets go?
In a Will, the beneficiaries (also known as “devisees”) are the people and/or organizations to which the assets are left. Most people have a pretty good idea of who their direct beneficiaries will be. Beneficiaries may be children, grandchildren, other family members, friends, charities, organizations, etc. Couples in second, or subsequent marriages may face more complicated decisions if there are children from a prior marriage.
Who will care for my Minor Children?
Parents with children under the age of eighteen (18) have two estate planning concerns. The first is providing for the custody of their children should both of them die at the same time. The second concern is nominating a conservator to supervise and manage any assets the child would inherit. The same person may fulfill both roles, or one individual may be named as the children's guardian and another as financial manager or conservator. The individual or couple that is selected cannot serve as legal guardian or conservator until approved by the court. It is always a good idea to name alternate guardians and conservators for minor children in case the first choice is unable to serve.
Providing care and support for children with a disability is also very important. Parents must choose a personal guardian to be responsible for the disabled child. Additionally, the parents must choose a financial manager to supervise any money or property they leave for the care of the disabled child for as long as the child lives.