Recently, I was asked “What is a Will?” Lawyers who deal with estate planning documents on a daily basis sometimes forget that terms that seem simple and straightforward to them are complex and confusing for most people. Here, therefore, is my explanation of what a Will is, and why you should have one.
A Will is a legal document which allows an individual to direct the disposition of both real and personal property at their death. To be a valid Will, with some very rare exceptions, it must be a written document which identifies the person making the Will (the Testator or Testatrix), that it is their Will and signed freely. Generally, the Will specifies the property owned by the Testator and to whom the property goes to at the Testator’s death; and, who will administer the transfer of property when the time comes. Finally, the Will must be signed and witnessed according to state law.
My great grandfather, Judge William T. Forbes, reduced a Will to one sentence:
“I, John Smith of Worcester, Massachusetts, making this my last Will and revoking all others, give all of my personal and real property to my wife, if she is then living, and if not then equally to my children and asking that my wife serve as my executor without sureties upon her bond. “
To go into more detail, here are some things to consider including in your Will:
Disposition of tangible personal property: Tangible personal property is often of higher emotional value than it is of financial value, as such it has been the source of many a family feud. This is particularly true if you promise something to someone, say a piece of jewelry, and later forget the promise, give it away or even lose it. I encourage clients to make a very general gift of personal property; and, if they want to be more specific, have a memorandum that designates more specific distributions which you can amend without changing your Will. There are also some details that, for specific personal property, need to be addressed, such as who pays the shipping costs for the 10,000 lb. bronze sculpture – the estate or the beneficiary? Also, you can make specific gifts of specific assets, such as stock or cash, if desired. If you decide to do so, consider what should happen if the stock has been sold before your death, or the percentage of your estate changes dramatically before your death. For example, if your estate is worth $100,000, and you give your nephew $10,000 as a specific bequest; and, before your death, you spend down your assets so you only have $20,000, your nephew will get $10,000, which represents 50% of your estate rather than the intended 10%. I usually say, “ to my nephew the sum of $10,000 or 10% of my estate, whichever is less.”
Disposition of real estate: Real property can be devised either by referring to a specific property or by a general gift. Real estate is devised, subject to any mortgages or other liens on the property, unless the Will specifies otherwise; and, in some case the Personal representative of the Will can sell a specifically devised property in order to pay the decedent’s debts and expenses of estate administration. When gifting real property, you should also include any property and casualty insurance proceeds from damage or loss effecting the property, and include whether the tangible personal property located at the property is, or is not, included in the devise. Sometimes clients wish to give the right to use the property to one person for their lifetime and the remainder to another person, which is called “granting a life estate.” Although it is possible to do so, it is messy when done under a Will, it is better to be done through a Trust. Another complication is how to handle real estate that is tied to some other interest, such as a cooperative apartment or a time share. In some cases, this should be handled as personal property, in other cases it should be handled as real property.
Disposition of the Residue of the Estate: When the specific bequests of personal property and devise of real property is described, there should be a residuary gift of the remaining assets in the estate. This can make distributions or it can “pour over” the residue into a Trust. The pour over trust is both flexible and private, commonly used for clients who need to hold assets to protect them from taxation, creditors of beneficiaries, mismanagement or to preserve control of family wealth. The Trust can be either created during your lifetime (a living trust) or at your death (a testamentary trust). Which is best and what terms the trust should include depends on the specific situation.
Appointment of Personal Representative: Previously called an Executor (or Executrix) the Personal Representative is the person you nominate to administer your estate under your Will at your death. It can be one person or several people, and you can name alternatives to serve if the first Personal Representative is unwilling or unable to act in that capacity. Although statues grant Personal Representatives many powers to handle the estate, it might be best to grant specific powers to the Personal Representative over specific property. For example, specifically authorizing a Personal Representative authority to honor a Buy Sell agreement over stock in the family business. In addition to a Personal Representative, if you have minor children, you should also nominate an individual to act as their guardian.
The Will needs to be signed, attested and, in most states, have a self-proving affidavit. Signatures can be by the Testator but can also be at the Testator’s direction, if they are unable to sign themselves. Usually, this signature must be attested to by at least two witnesses who are not beneficiaries of the Will. These witnesses must actually see the Testator sign the Will; they cannot attest to a Will that had been signed previously. When the Will is presented for allowance as part of the probate process, the witnesses must sign an affidavit that they did indeed see the Will signed, and that it was the Testator’s free act and deed. This requirement, however, can be avoided by having the witnesses and Testator acknowledge that they signed the Will before a notary – what is called a self-proving affidavit.
Why should you have a Will?
A Will makes the transfer of your personal and real property according to your wishes into an orderly and seamless process at your death. The Will can be as simple or as complex as your desires require; but in all cases, it should clearly define what your assets are, to whom you wish those assets to go and who you nominate to administer your estate.
This is the short answer to the question as to what a Will is. If you have other specific questions, you should consult your estate planning professional.