Wills are a vital element of estate planning and are necessary for probate estates and trusts. This document is used to appoint an estate administrator to manage the estate upon death, along with naming beneficiaries to receive property and arrange legal guardianship for minor children.
Setting up Wills is a relatively simple process, but it's best to work with an estate attorney to minimize estate tax and keep assets out of probate. Each Will is as unique as the person writing it. The kind of property that is documented depends on the type of estate planning strategies arranged prior to death.
People that own valuable property often setup trusts to avoid probate and lessen estate and inheritance taxes. People that have bank accounts, retirement funds, investment portfolios, and life insurance policies can gift proceeds by setting up assignment of beneficiaries.
When property is placed into a trust or assigned to beneficiaries it is exempt from probate and is not recorded in the Will. Items that are included in the Will are categorized as either general or specific.
Specific gifts refer to items that are intended for a particular person. General gifts refer to all other items that aren't individually gifted to beneficiaries. For example, a person could bequeath specific gifts such as jewelry, antiques, or family heirlooms to various relatives that are identified in the will and testament.
Everything else, such as household furnishings and clothing would be categorized as general gifts. It's unnecessary to list every possession other than specific gifts.
Wills provide people with the opportunity to have a final say in how their possessions are distributed upon death. When Wills pass through probate, heirs have the right to contest the Will if they did not receive something they feel entitled to. Contesting a Will is a costly process for the estate and Plaintiff. It also causes a great deal of family discord.
Unfortunately, there isn't an iron-clad method to prevent heirs from contesting the Will, but there are methods that can lessen the potential. Anyone that fears heirs will engage in probate litigation need to take extra steps to protect estate assets.
These can range from inserting a no-contest clause to disinheriting family members. A no-contest clause declares that heirs engaging in probate litigation give up their right to inherit items left to them in the Will.
Disinheriting relatives isn't something most people do, but there are situations that warrant this drastic measure. Anyone that needs to disinherit family members should obtain legal counsel to ensure the Will is written in accordance to state probate law.
Writing a Will is exceptionally important for parents and guardians of minor children. This is the document used to make arrangements for legal guardianship, as well as provide instructions about how inheritance is to be safeguarded until children reach legal age.
Preparing a Will helps protect estate assets and lessen burdens for estate administrators. When estates pass through probate the Will is used to give direction about reconciling the estate. Without one, the estate is reconciled to comply with state probate laws.
People that want to avoid probate altogether need to setup a trust. Many kinds of trusts are available and each serves a different purpose. Some of the more common include: living trust, irrevocable, revocable, and irrevocable life insurance trust. It's recommended to seek advice from estate lawyers.
There are many things to consider when arranging Wills and trusts. At Craton and Switzer we help clients understand available options and tax saving strategies so they can make informed decisions.
If you need help putting together an estate plan we encourage you to contact us to arrange a consultation. We also provide an estate planning blog that offers information about Wills and trusts, probate, power of attorney, estate tax and more.