1. WHAT
IS A WILL?
A will is a
signed writing in which a person (often referred to as the
"testator") directs what is to be done with his or her property after
death.
2. DO I HAVE TO HAVE MY WILL PREPARED IN THE
STATE OF MY PERMANENT RESIDENCE?
Each state has its own very specific
laws as to what is necessary for a will to be valid in that state. For example, you cannot execute a valid
holographic will in Florida—that is, a will written totally in the handwriting
of the Testator, without any formal execution and witnesses. However, you can execute a valid holographic
will in other states. Therefore, it is
important to have a will drafted by an attorney who is familiar with the laws
in the state where you live. In
addition, each state also has specific rules about who a person may
intentionally choose to leave out of their will and what a person’s spouse is
entitled to, regardless of whether provision is made for the spouse in the will
or not. For example, in Florida, if the decedent is survived by a spouse or
minor children, homesteaded property can NOT be devised to anyone else.
3. WHO
MAY MAKE A WILL?
Any mentally competent person
who is at least 18 years old may make a will. Later proof of fraud, duress, or
undue influence by another person or the testator may cause
the will to be invalid.
4. WHO
SHOULD HAVE A WILL AND WHY?
Every mentally
competent adult should have a will. Here are a few of the reasons:
a. You
can direct how you want your property divided upon your death.
b. You can name the person you want to handle your estate (called the "personal
representative").
c. You can reduce the expenses of administering your estate.
d. You can save taxes.
e. You can nominate a guardian for your minor children.
f. You may provide for a trust for the support and education of your children
or the support of some other person without the necessity of costly court
proceedings.
5. MUST A WILL BE WITNESSED? MUST IT BE
NOTARIZED?
In Florida, the signing
of a will must be witnessed by two competent persons, who also must sign the
will in front of the testator. Although
the law does not require a will to be notarized, it is highly recommended
practice, followed by most lawyers. If the testator's and witnesses' signatures
have been notarized, with what is called a self-proving affidavit, the will is
presumed to properly executed and is accepted by the court without testimony
from the witnesses.
6.HOW LONG IS A WILL VALID?
Your will is
valid until you revoke it, generally either by physical destruction (tearing or
burning it up, for example) or by signing a superseding will or written
revocation. If you get divorced after signing a will, the law may consider the
will partially or totally revoked. If you are married, your spouse may have
rights in your estate regardless of what is provided in your will. IN THE EVENT
OF A DIVORCE OR REMARRIAGE OR ANY OTHER IMPORTANT PERSONAL EVENT, IT IS VITAL
TO RE-EXAMINE YOUR WILL TO MAKE SURE THAT IT REFLECTS YOUR CURRENT SITUATION.
7. MAY A WILL BE CHANGED?
Your will does not take effect
until you die; therefore, it can be changed at any time during your life, as
long as you are mentally competent. Traditionally, wills were changed by an
amending instrument called a "codicil," but with the development of
modern word processing technology, it is usually better and just as easy to
sign an entirely new will when you wish to make a change.
8. WHAT HAPPENS IF YOU DON'T HAVE A WILL?
If you don't have
a will, a state statute directs who will receive your property, regardless of
your wishes. In Florida, if you die
survived by your spouse and no children, your spouse takes all. If you are survived by a spouse and children,
ALL of whom are also children of your spouse, your spouse receives the first
$60,000 of your estate and your spouse and children split the rest
equally. If you have children who are
NOT also children of your current spouse, your spouse and your children share
in your estate 50-50. Florida also has
specific laws with regard to the disposition of homesteaded property. In
general, homestead property of a deceased Florida resident consists of up to
160 contiguous acres outside a city limits, or up to ˝ acre inside a city
limits, which is used as the decedent as his permanent residence. If the
decedent is survived by a spouse or minor children, homesteaded property can
NOT be devised to anyone else. In general, if the decedent is survived by
a spouse and minor children, the surviving spouse takes a life estate in the
property and the minor children take the property at the spouse’s death.
These laws do not apply to property held as tenants by the entireties, which is
property held jointly by husband and wife, in that specific form of
ownership. Property held as tenants by the entirety passes by operation
of law to your spouse, and is not subject to the restrictions above regarding
homestead property.
9. IS
JOINT OWNERSHIP A SUBSTITUTE FOR A WILL?
In most cases,
joint ownership is not an acceptable substitute for a will. Contrary to popular
belief, joint ownership of assets between husband and wife often results in
excessive estate taxes. Joint ownership between parent and child may foster
disputes between family members and cause unexpected and unnecessary gift
taxes.
10. IS
A LIVING TRUST A SUBSTITUTE FOR A WILL?
A funded revocable
("living") trust can be a valuable and important part of the estate
plan for many people, but it does not eliminate the need for a will. A living
trust requires that you actually TRANSFER assets into it in order for it to
have any effect at all, which means that it requires preparation of some
paperwork. Even if you have a living
trust, you will still need a will to dispose of those assets that have not or
cannot be placed in the trust. As useful as they are, living trusts are
not appropriate for everyone. Only your lawyer can tell you if you should
consider one, and only your lawyer should prepare it.
11. WHO
SHOULD DRAFT YOUR WILL?
A person who
drafts a will must be familiar with the law in order to avoid the many pitfalls
and to comply with the formalities necessary to assure the will's validity.
Only a practicing lawyer is professionally qualified to give you advice
regarding your will, to prepare your will, and to supervise its
signing. Certainly, there are will forms
out there that you can obtain very cheaply.
However, the preparation of a professionally drawn will is a relatively
small investment in ensuring that your final wishes are observed. Once you are gone, it is too late to correct
any mistakes which you made in drafting the will yourself and your intended
beneficiaries could be the ones to suffer, as your estate could be partially
wasted in an unnecessary will contest.
12.WHAT TYPES OF ASSETS PASS OUTSIDE THE WILL?
There are certain assets that your
will does not control the disposition of. In general, if you have an asset that
you have the specific ability to designate the beneficiary, that designation
controls over the contents of your will.
Examples would be real estate or a bank account held jointly with
another person with right of survivorship, certain annuity or pension benefits
with a survivor designation, and proceeds of life insurance policies paid to a
specific beneficiary, etc. It is
important to note that, while these assets do not pass through the will, there
may be other estate ramifications of those assets, such as if attempt to
disinherit your spouse, etc.
PRACTICAL SUGGESTIONS
Planning your
financial affairs is a very personal and individual matter. You should decide
for yourself the general purposes you wish to accomplish, then consult with
Carol and any other advisors (accountant, financial planner, life insurance
agent) to plan properly how to accomplish your goals.
Take these five practical steps to
save time and help assure a sound result:
1.
Inventory your assets. List in reasonable detail all of your property (real and
personal) life insurance policies and retirement plans, with your best
assessment of their values.
2.
Inventory your liabilities. List all debts and obligations,
including principal amounts, payees and essential terms.
3. List
your family members and any other persons whom you wish to participate in your
estate. Determine who might be an appropriate personal representative, trustee,
or guardian for your minor children.
4. Decide
what you want to accomplish. Determine what your objectives are, and to whom
you wish your assets distributed, including any charitable donations.
5. Think
about funeral arrangements, burial plots, whether you wish to be cremated, and consider whether
you wish to make organ donations.
Once you
have taken the above steps, call our office to schedule an appointment to meet with Carol. We require that you fill out a questionnaire
in connection with the will, so you may wish to call our office and have us
send you the questionnaire in advance of your appointment. When you come for your appointment, be sure
to bring your
working papers and list of assets and liabilities and your questionnaire, if
you have already filled it out, with you. At that time, you can decide if you
want to have other documents prepared, including such items as a Power of
Attorney and an Advanced Medical Directive (Living Will).
TAX DISCLAIMER
Please be advised that I do not
prepare wills for estates in which it is anticipated that the estate will be
subject to estate tax. Your estate will have to pay estate taxes IF the net
value of your estate when you die is more than the exemption which is in effect
at the time of the your death. Following is a list of the current exemptions
from Federal estate taxes, based on CURRENT law-
Year of
Death and Amount of Exemption
2007 & 2008 = $2,000,000
2009 =
$3,500,000
2010 – As
of now, the estate tax is scheduled to be repealed entirely in 2010. However, please keep up to date with
developments in this area.