WHAT IS A WILL?
Here’s the big picture: a “Last Will and Testament” or a “Will” is a legal document that expresses your postmortem wishes. It appoints a personal representative or executor to in probate. It designates a guardian of the person and property of minor children. It usually covers burial instructions, funeral expenses and estate tax apportionment. However, it is most commonly understood to govern the transfer of a deceased person’s property to his/her designated beneficiaries. The term “Property” includes everything you can possibly own, such as cash, stocks, bonds, houses, vehicles, jewelry, artwork, business interests, and even future interests-think Michael Jackson. His estate will be open for a very long time. In other words, property is everything you own, both now and in the future.
WHY IS A WILL IMPORTANT?
Regardless of how much money or assets you have, you have an estate so you should have a will. Here’s why: First and foremost, mostly everyone can have one. In Florida, you only need to be 18 years old (or an emancipated minor) and have what’s called, “mental capacity”. Second, you have the freedom to choose your beneficiaries. If you don’t have a will, your home state will, among other things, choose your beneficiaries for you. This can be problematic if you have children or are divorced and especially if you have children from other marriages. Third, there are different types of wills. A properly drafted will can preserve and protect your beneficiaries’ interests in their inheritance, both from themselves, if financially irresponsible, and from their present and future creditors. If your family is going to inherit assets from you, you might as well protect them. Otherwise, you’re going to make outright gifts which are dangerous. Lastly, the combination of a will and other planning tools like a trust will better serve your family’s long-term goals.
ARE WILLS ENOUGH?
I’m going to assume that your family’s long-term goals are to 1) preserve and protect your family’s assets for future generations; and 2) and minimize needless emotional drain and administrative hassle in the transition from one generation to the next. With that in mind, relying on a will alone is not enough. There are too many things that can go wrong, and even if things go right, there’s better alternatives for you and your family. What can go wrong? Well, the failure to take advantage of life-time gifts and other estate planning tools can result in needless taxes. It can even result in the loss of the very assets that you plan to give to your family. Additionally, having a will doesn’t avoid the world of probate. Watch the video on probate to learn why that’s so important. Contrary to what you may think, the determination of whether a will is valid occurs in probate AFTER death rather than at the time it’s executed. You could be walking around for years with a false sense of peace of mind. Remember, small mistakes and omissions can have disastrous consequences to you and your family. Failure to comply with the necessary formalities renders a will invalid, and an invalid will is no will at all. Again, that brings us back to your home state choosing your beneficiaries for you, which can have devastating and priceless effects. Lastly, probate provides both an invitation and a convenient venue for a will contest. Sadly, you can expect that invitation to be accepted if there are questionable circumstances surrounding the will execution or if a beneficiary is disappointed with his/her inheritance. In either case, it’s wasteful and avoidable.
SHOULD I DO IT MYSELF?
All this is especially true when it comes to “Do It Yourself” products. I have a degree in computer information science and I’m also in the software business so I understand how these systems work. Unfortunately, algorithms cannot represent your best interests. In fact, they don’t. That’s why you have to sign a disclaimer that you haven’t received legal advice. “Do It Yourself” products are terrible ideas for clients because you and your family’s circumstances do not fit squarely into an algorithm. Your family is special, and you want to ensure your documents are validly executed, accurately reflect your wishes and are tailored to meet your particular needs and goals. “Do It Yourself” products at best should be characterized as only temporary solutions.
SO THEN WHAT?
Having a will is like having enough gas, but not having the right car. You might get to where you’re going, but it may not be the quickest or most pleasant journey. There are better ways to get there, which include using trusts.
(Often times, people refer to executing a last will and testament as making a will, willing, making a devise or devising, bequeathing or giving, and receiving under a will as inheriting. Please note that drafting a will usually includes language indicating that the new will revokes all prior wills and codicils. A codicil is an amendment to a will, which can be simple or complex).