What is a Last Will and Testament?
This is a legal document; It communicates a person's last wishes to their dependents, and the handling of personal assets. This also provides the opportunity to make specific bequeaths to individuals and charities, to make unequal bequeaths and to provide for particular circumstances or concerns (e.g. a child with disabilities). The testator (the deceased) has the ability to select a personal representative of their choosing to work with the Probate Court to carry out the terms of the Will.
Who should have a Will?
Everyone should have a Last Will and Testament. Without a Will, the Probate court will decide what happens to your property and dependents. When a person passes without a Will, it is called an intestate death. There can be significant consequences in this situation. The property is distributed according to the state code. Dependents are cared for according to the rules of that jurisdiction.
For example, in Virginia, when a person dies intestate and leaves a spouse and minor children, the spouse inherits everything. In Maryland, the spouse gets half of the deceased spouse's estate and the children get the remaining half. In the event that the children are over 18, the spouse inherits $15,000 and the balance of the estate. The remainder is then passed to the children. In the District of Columbia, the spouse inherits two-thirds and the children get the remaining one-third.
As demonstrated, the Court will follow the intestate rules in that jurisdiction's code.
Sometimes the results can be far from what the decedent may have wanted.
What assets pass through a Will?
All personal property will pass to descendants, either through the Will or according to the intestate rules of each jurisdiction. Bank accounts and other savings accounts (such as IRA accounts, retirement accounts, stock accounts...) will pass under a will, unless there is a "Paid On Death" certificate attached to that account. Your bank can help with this document and this will assure that all accounts will be distributed as planned without the Will taking precedence.
Real estate will pass through the Will according to how the property is titled. If titled as Tenants by the Entirety, which is how married persons generally hold title, then the real property passes to the surviving spouse entirely and the Will cannot change that transfer. If the property is held as Joint Tenants, then the deceased person's share will pass to the remaining title holder(s) evenly (if three persons hold as Joint Tenants and one passes, the remaining two own the entire property, each as to one-half). Again, the any attempt to transfer this real property in the Will is of no affect. If the real property is held as Tenants in Common and one owner passes, the share of the property held by the decedent passes by direction of the Will or by intestate rules, not to the remaining title holders.
What assets pass outside of the Will?
If the decedent is the beneficiary of trust, the assets in the trust will be distributed according to the terms of the trust and will not pass under the terms of the Will. Life insurance proceeds will go to the beneficiary of the policy holder, again not through the Will. There should always be an alternate beneficiary named of the policy in case the original beneficiary has passed. The policy holder and the insured individual do not necessarily have to be the same person. Generally, all retirement accounts should have an alternate beneficiary named in the account documents.
Details on how the Will must be executed.
The Will should be typed and printed. Hand written Wills are acceptable but must be authenticated to confirm that the hand writing is that of the decedent. This type of Will can be subject to attack in the Probate Court. That court proceeding may involve a hearing with testimony from witnesses as to the hand writing of the decedent. Either way the final Will needs to be signed in front of a notary and to have the notary set their seal on the signature. There should be at least two, disinterested witnesses. This means no family members or any one named in the Will can be a witness to the Will.
The Will should name a Guardian for all minor children, with an alternate also named. This is very important since these are the persons that will care for the minor children if the parents pass. The deceased parents should be the ones who decide who will care for their children. Otherwise the court will accept petitions from prospective Guardians, usually a family member that steps forward. This is not always the case.
The Will should also set up a trust for these children. If there is no trust in the Will or a separate trust, the court will set up a trust for the minor children. The problem is that this court ordered trust will end at age 18. At that age, the children will receive the assets that are in the trust, which come through the Will. They may not be mature enough to handle any substantial assets, such as real estate or insurance proceeds. When the trust is in the Will, the decedent has more control and can set the terms of the trust; primary beneficiaries of distribution, The apportioning of assets the pattern of distribution.
The importance of the Will touches several issues. The distribution of assets as the decedent wants, the appointment of Guardians for minor children and the preservation of assets for the future use of the minor children