A Will, or Last Will and Testament, is the backbone of the traditional estate plan. Most people have heard of wills, or seen family members or friends go through the probate process to administer a loved one's will. The law surrounding a last will and testament is both strict and unforgiving and also deceptively simple. It is very easy for people to execute a will that doesn't really do what they intended. Many people are drawn to the "cheaper" online estate planning websites, but the bottom line is that those people are getting what they paid for - a $70 will is as ineffective as a professionally written will IS effective.
It is crucial to meet with an experienced estate planning attorney, like Kelly Parks, before trying to make a will.
What is a Will?
A will, is a legal document that allows individuals to specify how they want their assets and property to be distributed after their death. It is one of the fundamental components of estate planning and serves several important purposes:
List of Services
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1. Asset DistributionList Item 1
A will enables individuals to designate beneficiaries who will receive their assets and property upon their death. This can include real estate, personal belongings, financial accounts, investments, and other valuable possessions.
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2. Appointment of ExecutorsList Item 2
In a will, individuals can appoint an executor, also known as a personal representative, to administer their estate and ensure that the terms of the will are carried out according to their wishes. The executor is responsible for handling various tasks, including probate proceedings, paying debts and taxes, and distributing assets to beneficiaries.
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3. Guardianship for Minor ChildrenList Item 3
Guardianship for Minor Children: For individuals with minor children, a will allows them to nominate guardians who will assume legal responsibility for the care and upbringing of their children in the event of their death. Without a will, the court will determine guardianship based on state laws and the best interests of the children.
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4. Expressing Specific WishesList Item 4
A will provides individuals with the opportunity to express specific wishes and instructions regarding their funeral arrangements, burial or cremation preferences, and any other personal matters they deem important.
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5. Avoiding Intestacy
Without a valid will in place, state laws of intestacy will govern the distribution of an individual's assets upon their death. This means that the state will determine how assets are distributed among surviving family members according to a predefined hierarchy, which may not align with the individual's preferences.
The Language of a Will
While the specific sections of a will may vary depending on individual circumstances and preferences, common sections typically found in a will include:
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Introduction and Identification
The will typically begins with an introductory section that identifies the testator by name and confirms their intent to create a valid last will and testament.
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Revocation Clause
This section explicitly revokes any prior wills or codicils (amendments to a will) made by the testator, ensuring that the current will is the most recent expression of their wishes.
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Appointment of Executor
The testator appoints an executor, also known as a personal representative, to administer the estate and carry out the terms of the will. The executor is responsible for managing the estate, paying debts and taxes, and distributing assets to beneficiaries according to the terms of the will.
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Disposition of Property
This section outlines how the testator wishes to distribute their assets and property among beneficiaries. It may specify particular bequests of specific assets or property to named individuals or organizations, as well as instructions for the distribution of the remainder of the estate (residuary estate) after specific bequests have been satisfied.
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Guardianship Provisions
For testators with minor children, the will may include provisions for the appointment of guardians to care for and raise the children in the event of the testator's death. The nominated guardians are responsible for providing physical and emotional support for the children and making important decisions regarding their upbringing.
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Trust Provisions
If the testator wishes to create trusts for the benefit of specific beneficiaries, such as minor children or individuals with special needs, the will may include provisions establishing the terms and conditions of the trusts, appointing trustees, and specifying how trust assets are to be managed and distributed.
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Miscellaneous Provisions
This section may include additional provisions and instructions related to funeral and burial arrangements, the disposition of digital assets, and any other matters the testator deems important.
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Witness and Execution
A will must be signed by the testator in the presence of witnesses to be legally valid. The witness section of the will identifies the witnesses who attest to the testator's signature and confirms that they witnessed the testator's signing of the document.
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Self-Proving Affidavit
In Ohio, a self-proving affidavit is sometimes included as part of the will. This affidavit, signed by the testator and witnesses in front of a notary public, serves as evidence of the validity of the will and may expedite the probate process by eliminating the need for witness testimony during probate proceedings.
Why Having a Will Matters
A commonly asked question is "what's the big deal if I don't make a will?". Under Ohio law, there is a dividing line between the rules when a person dies with a will in place (testate) vs. the rules when a person dies without a will (intestate).
Dying Intestate
It can be a costly mistake to assume that you don't need a will because "my spouse gets my stuff anyway, so it's not a big deal!". For good or bad, the people who will pay the cost of that mistake will be your family.
Anytime someone dies, their individually titled assets (bank accounts, real estate, vehicles, etc.) are essentially "frozen". Banks won't let a family member just walk into a branch and pull the money from the account, the BMV won't let your spouse sign over title to sell your car, and title agencies won't let you sign your own name to sell the decedent's house.
Ohio law requires the probate court to oversee the decedent's estate - it takes a court order from the probate court to make a bank release funds from the account, or approve the transfer of a vehicle, or to order the transfer or sale of real estate.
When the estate is intestate (meaning the person died without a will), The probate court exercises very strict control over how their estate is administered. The person (called the administrator) who is appointed by the court (usually a family member) to handle the final affairs will be required to post a monetary bond as an incentive to not take or mismanage the estate's funds. The court will have to preapprove every action before the administrator takes it - making the process take significantly more time. Additionally, more than one family member may apply to be the administrator, causing a delay while the court holds a hearing to decide who should get the job.
As to the estate itself - when a person dies intestate they do not get to decide who inherits from them. Even if they verbally made their wishes known to the family, not having a valid will in place means their assets will be distributed by the probate court according to state law - the Statute of Descent and Distribution. Essentially, the administrator is required to follow a schedule written into the statute that determines who inherits from the estate. It doesn't matter if the person receiving an inheritance was estranged from the decedent; they are still legally entitled to their inheritance.
The bottom line; only very low asset estates should be considered safe to be intestate. Even low value estates can be caught up in lengthy, expensive delays when there is no will. No one wants to pay a bond, pay an attorney, pay court costs, and wait weeks or months just to close out a checking account with a balance of just a few thousand dollars.
Dying Testate
In contrast, people who die having put a will in place leave behind a more streamlined process for their family to probate their estate. The same basic rules apply: assets will be frozen, the probate court must open a case and appoint someone to administer the estate, etc. But, when a person dies testate there is much more leeway to the rules, allowing the estate to be handled more efficiently and cheaply.
Part of writing a will includes naming an executor. This is the person you are choosing to administer your estate. (intestate estates have administrators, testate estates get executors). You can specify in your will that your executor does not need to be bonded. It is difficult for multiple family members to fight over who should have the job of administrator because the court will generally honor your wishes and appoint the person you named in your will to be the executor.
Many basic tasks of administering the estate are easier for executors compared to administrators. You can write specific powers into your will that the court will honor, such as the power to sell real estate for just one example. Where an administrator would have to go through a multi-step complicated process to get a court order permitting them to the sell the property, an executor of a well-written will can simply hire a realtor and sell the property, and then include the sale information in their eventual report and accounting to the court.
Additionally, the primary benefit of writing a will - deciding who will inherit from you - will be in place. Any specific gifts you listed will be honored by your executor and the probate court (assuming they are valid gifts of items you still own when you die), and you get to decide who gets the remainder of your estate (with some limitations).
The key takeaway should be the understanding that it is always better to have a will than to not, and if you are going to make a will, getting an experienced estate planning and probate attorney to write it will mean the will is worth its weight in gold.
Wills that work with Trusts
A companion will to a trust, also known as a pour-over will, is a legal document that works in conjunction with a trust as part of an individual's estate plan. The purpose of a companion will is to ensure that any assets not already transferred to the trust during the individual's lifetime are "poured over" into the trust upon their death.
Asset Transfer
During the individual's lifetime, they establish and fund a revocable living trust by transferring assets into the trust. These assets may include real estate, bank accounts, investments, and other valuable property.
Pour-Over Provision
The companion will contains a pour-over provision that directs any assets held outside of the trust at the time of the individual's death to be transferred into the trust. These assets are then distributed according to the terms and provisions outlined in the trust document.
Backup Plan
The pour-over will serves as a backup plan to capture any assets that were inadvertently left out of the trust or acquired after the trust was established. It ensures that all of the individual's assets are consolidated within the trust for efficient management and distribution after their death. Additionally, a will can be written to include provisions for the executor to create a new trust with the same terms as the old one if the original trust no longer exists for some reason.
Probate Administration
While the pour-over will helps transfer assets into the trust, it does not necessarily avoid probate. Assets transferred into the trust through the pour-over will may still be subject to probate administration, but they will ultimately be distributed according to the terms of the trust rather than the default rules of intestate succession.
Executor and Trustee Roles
The executor named in the pour-over will is responsible for initiating probate proceedings, identifying assets, paying debts and taxes, and transferring assets to the trust. The trustee of the trust then assumes control of trust assets and administers them according to the trust provisions.
Overall, a companion will to a trust is an integral component of a comprehensive estate plan, especially for individuals who have established revocable living trusts to manage their assets during their lifetime and streamline the estate administration process after their death. It ensures that the individual's wishes regarding asset distribution are carried out efficiently and effectively, while also providing flexibility and control over the disposition of their estate. Working with an experienced estate planning attorney, such as Attorney Parks, can help ensure that your companion will and trust are properly drafted and coordinated to achieve your estate planning goals.
