What is a Will?
A will is a formal document which provides for the disposition of some or all of a person’s assets when he or she dies. In order to be valid, a will has to be signed at the end of the “text.” It has to be signed in front of two witnesses who see the person sign it and know that the document is a will.
What assets pass by will?
Not all of your assets pass under your will. Anything in “joint names” goes directly to the surviving joint owner(s). Life insurance, IRAs and other retirement plans generally pass to named beneficiaries. Only solely owned assets pass by will. These include interests in partnerships, LLCs as well as partial interests in real estate.
Naming a Guardian in your will
One of the most important decisions you can make is selecting a guardian for your children. The guardian is a “substitute parent” with whom your children will live. The guardian is responsible for your children’s upbringing, education and medical care.
Carefully consider how the people you choose are raising their own children. Would the guardian have room in his or her house for your children?
If you are naming a couple as guardians, do you really want to name only one of them if they are divorced or if the other of them dies? EXAMPLE: You name your brother and his wife as co-guardians. If your brother could not be guardian, would you still want your sister in law to be guardian or would you prefer to have the successor guardian serve?
If I have a trust, do I need a will?
The majority of our clients use Revocable Trusts as their primary estate planning vehicle. These trusts, to some extent, take the place of a will. However, even with a fully funded trust you still need a will for several reasons.
We almost never put personal use assets, such as cars, boats and jewelry, into trusts. It’s better to use a will to deal with these items. You can only appoint a guardian by will. Having a will, and some assets that pass under it, shortens the period in which creditors can present claims. It also gives us the opportunity to save taxes by using a fiscal year, rather than a calendar year, for estate income tax purposes.
Choosing an executor
The person who administers your estate is called an Executor. The Executor does not take care of your children. That is the Guardian’s and Trustee’s responsibility.
The Executor essentially has several tasks. He or she has to take control of all of your assets, file whatever documentation is required in the Probate Court, comply with any tax filing and payment requirements and distribute your assets in accordance with your will. Click here to read more about estate settlement.
Many people designate their spouse as Executor. You should designate a successor Executor if case the person you initially selected cannot serve. An Executor’s job is administrative. He or she need not be personally familiar with the estate settlement process. A competent lawyer can assist him or her. An Executor does need to be a trusted person who is able to maintain perfect records.