Making Your Own Will
A.
What a Will Can Do for You
Most people know what a will does, at least in a general way -- they understand that it's a document created to make binding provisions for who receives property after death.
| Estate Planning Vocabulary |
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"Estate" is the legal term for all the property you own. You have an estate whether you're wealthy or impoverished, as long as you own something. "Estate planning" means arranging for the transfer of your property after your death. The phrase also includes related concerns, such as providing for minor children. The planning involved can be just making a will, or it can involve more complex matters, such as creating trusts to benefit a disabled child or reduce estate taxes.
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A will is the simplest estate planning device, and the easiest to prepare. If you're like many people, a will is all the estate planning you need or want, at least for a long time. Most younger people (roughly, under age 50) want to be certain their desires regarding their property will be carried out if they die; they also know that, statistically, it's highly unlikely that they'll die for decades. So they decide to postpone the cost and hassles of more complex estate planning until their autumnal years. A will is all they need for now.
Similarly, the primary estate planning goal of many younger couples is to ensure to the best of
their abilities that their minor children will be well cared for -- and financially provided for -- if both parents should die together. Of course, a single parent has the same concerns. A will enables a parent to handle these matters.
Finally, many people simply don't want the bother and cost of extensive estate planning, no
matter what their age or health. Fortunately, preparing a will achieves their basic goal of
distributing their property as they see fit, with as little hassle now as possible. If you don't need or want comprehensive estate planning, or have been postponing or procrastinating considering it, be
sure you at least have a will.
The French philosopher Rabelais wrote a one-sentence will: "I have nothing, I owe a great deal, and the rest I leave to the poor."
| Vocabulary -- Gifts |
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Throughout this book, except where otherwise indicated, the word "gift" means any property you leave by your will, whether left to individuals or institutions. Sometimes, lawyers distinguish between "devises" (gifts of real estate, also called real property) and "bequests" (gifts of personal property, meaning everything but real estate). This book uses "gift" to cover both types of property.
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What Your Will Can Do
When you prepare a will using this book, you can accomplish all these goals:
- Leave your property, including your home, to those you choose -- your spouse, partner, children (including minor children), grandchildren, other relatives, friends, organizations, or charities.
- Provide for an alternate person or organization to inherit something if the first person you pick
to receive it fails to survive you.
- Appoint your executor -- that is, the person who handles your property after you die and makes
sure the terms of your will are carried out.
- Nominate a personal guardian to care for your child or children, should you die before they
reach age 18 and the other parent is unable or unwilling to care for them.
- Choose someone to manage property you leave to a minor or young adult. You can select the
management method you decide is best for your situation. Your choices are to set up an individual child's trust or a "family pot trust" (all property left to minor children is put in one
pot), leave a gift using the Uniform Transfers to Minors Act, or leave the property directly to
your minor children, to be supervised by the property guardian you name in your will.
- Revoke all previous wills.
- Forgive debts owed to you.
- Handle what happens to your property if you and your spouse die simultaneously.
- Disinherit anyone you want to, except where state law restricts your power to disinherit your
spouse.
| Using the "Right" Language |
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Many people worry that the gifts they want to leave in a will they prepare themselves may not turn out to be legally binding. This worry is expressed in many ways, such as:
"I'm concerned about legal requirements. How can I leave gifts so that I know my wishes will be followed? What's the right language to use to leave my property?"
"I want to leave many specific gifts to family and friends. I have pictures, mementos, heirlooms, and antiques. How can I ensure that the proper people get them, and that no one else can claim them?"
Using the will forms in this book, you can be sure that all gifts you make in your will are legally binding. To accomplish this, you need only write your intentions in plain English. No "legalese" is required. The will forms contain all the technical language required for a valid will.
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When You May Want More Estate Planning
A will is an indispensable part of any estate plan, and it's all the estate planning many people
do. Other people decide they need to do some additional planning.
Here are the most common estate planning issues that prompt people to go beyond making a will:
- reducing probate costs and delays (probate is the court process your will must usually go
through after your death)
- reducing federal estate taxes, which may affect estates worth $2 million or more, depending on
the year of death
- protecting your assets, as far as possible, from being depleted if you or your spouse suffers a
catastrophic illness.
You may also want more than a will if you have a personal situation that requires specialized and
sophisticated legal work. For example, if you have a child with a disability, you'll want to provide for that child while at the same time preserving his or her eligibility for government benefits. You can accomplish this through a special trust, which you can prepare yourself or have prepared by an expert. (See Chapter 14 for more on special needs trusts.)
Another situation in which you may need a trust is if you're married and have children from a
prior marriage. However, some people in second or subsequent marriages need no more than a will. If you just want to divide your property, leaving some to your spouse and some outright to children from former marriages, a will from this book will work fine. For instance, a woman can safely use a will to leave her share of a co-owned house and an investment in a limited partnership to her husband, and leave other major items of her property, including jewelry and stocks, to her children from her first marriage.
If you want to leave property in a more complex manner, however, you'll need arrangements beyond
what's possible with this book's will forms. For example, you may want to leave property for the use of your spouse during her or his life, with the property to go to your children after death of the
spouse. Accomplishing this requires a trust, often called an "AB" trust. A property control trust must be drafted by a knowledgeable attorney; there are too many complexities and individual differences for a standardized, do-it-yourself form.
If you don't know now whether or not you want more than a basic will, relax. As you work through
this book, you'll get a good idea of whether or not a will can satisfy all your estate planning concerns. Chapter 14 discusses estate planning issues in more detail.
 More information about estate planning. All these estate planning matters, and many others, are discussed in great depth in Plan Your Estate, by Denis Clifford (Nolo).
| Protecting Assets: A Catastrophic Illness Clause |
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The will forms in this book do not contain what some people call a "catastrophic illness clause." This term is commonly used to mean a will clause that tries to preserve assets from being used for the costs of a major illness that strikes oneself or one's spouse. More particularly, many people want to preserve their eligibility for Medicaid or Medicare without having to use up all (or even any) of their assets. Married couples want to protect, at least, the assets owned by the healthier spouse.
A catastrophic illness clause certainly sounds like a good idea. But unfortunately, no simple will
clause can protect your assets. Simply put, the law doesn't allow you to easily retain your assets and still be eligible for federal aid.
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Getting expert help. There are various
ways of protecting some of your assets from huge medical bills: making gifts, paying children for services, and using certain complex types of trusts. These methods are discussed in Long-Term Care: How to Plan & Pay For It, by Joseph Matthews (Nolo). If you want to take such concrete actions, see a lawyer knowledgeable in this distinct legal area. To help you, a lawyer must be up to date on relevant federal and state statutes and regulations, which can change fast.
Property You Can't Leave by Will
A will usually doesn't affect certain kinds of property that you've legally bound yourself to
transfer by other means, including:
- Property held in joint tenancy, which will automatically belong to the surviving joint tenants at your death. A will provision leaving joint tenancy property would have no effect unless all joint tenants died simultaneously.
- Property you've transferred to a living trust.
- Proceeds of a life insurance policy where you've already named a beneficiary for the policy.
- Money in a pension plan or in an individual retirement account such as an IRA, 401(k), or profit-sharing plan, or any other retirement plan for which you've named a beneficiary.
- Money in a pay-on-death bank account or stocks held in a transfer-on-death account, for which you have named a beneficiary to receive whatever is in the account when you die.
- Property specifically controlled by a contract. For example, if you are a partner in a small business, the partnership agreement (a contract) may limit your ability to dispose of your interest in the business by will. The surviving partners may have the right to buy a deceased partner's interest at a "fair market value." You can, of course, specify in your will who is to receive the money from this sale.
If you live in the state of Washington, however, there's an exception to this general rule: you are allowed to leave some of the property listed above by will.
For more general information on the kinds of property discussed above, see Chapter 14.
Illegal or Unenforceable Will Provisions
There are also a few legal limitations on what you can do in a will. You cannot:
- Encourage or attempt to restrain certain types of conduct of your beneficiaries. For example, you cannot leave a gift contingent on the marriage, divorce, or change of religion of a recipient. You can, however, make a gift contingent on other behavior -- for example, "to John, if and when he goes to college." Why this distinction? Because courts say that "public policy" prohibits attempts to coerce fundamental rights like the choice of spouse or religion. But it's allowable to try to control lesser matters, like going to school. However, you cannot use this book to impose controls over your beneficiaries or property, except leaving property in a trust for children. Making contingent gifts almost always opens a can of worms -- for instance, who will enforce the will's conditions, and for how long?
- Leave money for an illegal purpose, such as encouraging minors to smoke tobacco.
- Leave property to felons convicted of certain crimes. These rules vary from state to state.
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