Estate Planner May-Jun 1997
Young people, single people, people without children and people with less than $600,000 in assets often think that they don’t need wills. The fact is, everyone needs a will. Let’s look at some common questions about wills.
Q: Does everyone have an estate?
A: Yes, if you own anything at all. The term applies not just to real estate, but also to cash, cars, furniture, books, insurance and retirement plans — all property.
Q: What happens if I die without a will?
A: Your state’s laws of descent and distribution take over.
Q: Why not let state laws take over?
A: State laws are impersonal — they don’t make exceptions, they may deplete your estate unnecessarily, and they are written to predict your desires (without knowing them) concerning choosing your administrator and guardian of your surviving minor children. The state also cannot make charitable gifts.
Q: Doesn’t joint ownership make a will unnecessary?
A: No. That’s a common misconception. Joint ownership may not eliminate estate taxes and may even create gift taxes. It may also deny you complete control over your property while you’re still living. Joint ownership is a poor will substitute, but can work well in conjunction with a will.
Q: Do I need a will if my estate is small?
A: Yes, the smaller the estate, the more important that it be settled quickly — delays usually mean more expense. Besides, your estate may be larger than you realize. Don’t think of your property in terms of what it cost originally. Its value may have increased substantially. A will also may cut probate costs, waive bonding requirements, and name heirs and legatees.
Q: Can I name my spouse as executor?
A: Yes. Or name a close relative or friend, or the trust department of a bank or other corporation.
Q: Can an executor refuse to serve, before or after accepting the position?
A: Yes. This can occur due to ill health, travel or the press of other business and is one reason it’s wise to name an alternate executor. The trust department of your bank may be your best choice to act as executor because it will always be able to serve.
Q: What does the executor do?
A: The executor’s role, in general, is to probate your will; collect your property; file necessary tax returns, including income tax returns and federal estate tax returns; pay any claims made by creditors; dispose of your property in accordance with the will; and close the probate estate.
Q: Is there a danger that my bequest may not be distributed as planned?
A: Yes. This may occur due to an incorrect or unofficial name in your will. Use an additional identifier, such as “friend,” “sister” or “town of residence” designation.
Q: How many witnesses does my will require, and must they read the will and know its contents?
A: State laws differ on the required number of witnesses, who merely must attest that you have said it is your will and have signed it in their presence.
Q: Is it legal for a witness also to be a beneficiary of the will?
A: Yes, but it’s not advisable because it may result in the witness not receiving property left to him or her.
Q: Once I have a will, should I ever have to change it?
A: Probably, because even the best wills often become outdated. Review your will periodically in light of changes in marital status, financial status or interests. Updating your will may require nothing more than a simple amendment (codicil).
Q: Am I required to change my will when moving to another state?
A: Most states recognize a will drafted in a state where you previously resided (if the will was properly executed in that state). But it is always a good idea to have your will reviewed by an attorney in the state of your new residence.
Q: Once my will is completed, where should I keep it?
A: Sign only one copy and keep it in your office, home or bank safe-deposit box, or ask your attorney to keep it for you. Retain an unsigned duplicate, so you can easily check it periodically to see if it needs updating.
Q: Is there anything else I need to know about wills?
A: An article like this can only cover the main points. Each person’s circumstances and wishes are different, so consult an attorney about your will.