| Introduction
to Wills
Wills
are the most basic of estate planning documents. First introduced
in medieval England, wills are basic instructions to a court how
a deceased person wanted to distribute money and property. Everyone
who is concerned how their estate will be divided should (at the
very least) have a current and valid will.
 What's
In a Will?
Within
a will, you describe several things:
1.)
Who you are, and what right you have to give away property;
2.)
A description of the property itself; and
3.)
Exactly who you want it to be distributed to.
Wills
are extremely easy to draw up. A qualified estate planning attorney,
although recommended, is not always required. Many courts have accepted
simple handwritten wills drawn up without any legal counsel. In
addition, internet and software companies manufacture programs that
create a will right from your home computer. Some states even allow
an oral will to be acceptable; however, it is best to execute a
formal will (just to be sure).
Publicity
vs. Privacy
While
its simplicity is a definite benefit, a will has serious disadvantages.
For instance, a will is only an instruction to a court of law; it
can be contested. Once entered into court, your will is public
record, eliminating any privacy.
Relatives,
friends, and associates can be reading a newspaper, read about your
death and petition the court to share in your wealth. Family Court
can be heartbreaking for many; not only do your loved ones have
to cope with your death, but then have to battle other acquaintances
and distant family members for the right to your estate.
Can
a Will Be Invalid?
Unfortunately,
when a will comes before a court, you are no longer around to vouch
for it. A will can be found to be invalid for several reasons including:
- Improper
execution
- The
grantor was not mentally competent and able to understand what
they were doing when they executed the will
- The
will was made under duress, or as a result of undue influence
from another person.
If
the will is found to be invalid for any reason, the court will usually
treat it as though you had died intestate, or without a will.
At that point, the particular state you reside in will decide how
your property will be distributed. And if there are no living relatives,
the property reverts back to the state.
Wills
and Probate
The
process of having an attorney present your will before a court is
called probate. Groucho's probate lasted many years, and
was especially expensive because of his celebrity status. Unlike
living trusts, each and every
will must go through the probate process. Probate usually ties up
the estate anywhere from 9 months to 2 years, and can cost approximately
2-4% of your entire estate value. (For more information on probate,
see The Perils of Probate.)
What
Happens If You Become Incapacitated
Wills
only become effective when you pass away; they do nothing for you
while you're still alive. For instance, if you should become incompetent,
and not have named a trustee or given power of attorney to someone
else, the court will decide your proper medical care and distribution
of assets. By the time you pass away and the will goes into effect,
there may be little of your original estate left for your family.
Nothing
Worse Than Death AND Taxes
Wills
do nothing for estate taxes. Individuals that have assets, including
real estate, over $2 million are subjected to extreme estate
taxes that climb up as high as 46%. Plus, if you're married,
a will may not maximize the Estate Tax Credit exemption for both
individuals; in some cases, the $2 million exemption meant
per individual is reduced to $2 million per couple.
Drafting
Your Own Will
Each
family's situation is different. For some, a will is sufficient.
However, it is the most basic of estate planning documents. If you
wish to preserve your wealth for generations to come, then you may
want to combine a will with other advanced estate planning techniques.
While
a will can be drafted with simple estate
planning software, it's usually wise to have a professional
estate attorney do it for you. Legal counsel may help you avoid
many of the pitfalls associated with wills, and ensure that the
chances it could be contested are reduced.
For
more information on wills and how they can be drafted, contact SaveWealth.com today!
|
