1. Wills in General. Wills are the most common way for people to state their preferences about how their estates should be handled after their deaths.
The person making a will is called a “testator.” The persons receiving benefits under the will are called “beneficiaries.” If a beneficiary receives a bequest of a specific parcel of real estate, the beneficiary is referred to as a “devisee.” Other beneficiaries under a will may be called “legatees.”
With a will, a testator can provide for the distribution of property at his or her death, including gifts to charities and establishment of trusts, called “testamentary trusts.”
Moreover, a testator can nominate a guardian for minor children, an executor to administer the estate, and a trustee to administer a testamentary trust. A testator can nominate successors to fill each of those positions. The term “nominate” is used, because the appropriate court has the final say as to whether a nominated person will qualify to act. For instance, a felon or a drug abuser may be denied the right to act in any of those capacities even though nominated by the testator.
The personal representative consolidates and manages the testator’s assets, collects any debts owed to the testator at death, sells property necessary to pay estate taxes or expenses, and files all necessary court and tax documents for the estate. A personal representative named in a will may be referred to as an “executor.” A personal representative appointed by a court where there is no will may be referred to as an “administrator.”
2. Will Requirements. Formal requirements for wills vary from state to state. Generally, the testator must be an adult of “sound mind”, meaning that the testator must be able to understand the full meaning of the document. Wills must be written. Some states allow a will to be in the testator’s own handwriting, but a better and more enforceable option is to use a typed or pre-printed document. A testator must sign his or her own will, unless he or she is unable to do so, in which case the testator must direct another person to sign the will in the presence of witnesses, and the signature must be witnessed and/or notarized. A valid will remains in force until revoked or superseded by a subsequent valid will. Some changes may be made by amendment (called a “codicil”) without requiring a complete rewrite.
3. Limitations. Some legal restrictions prevent a testator from giving full effect to his or her wishes. Some laws prohibit disinheritance of spouses or dependent children. A married person cannot completely disinherit a spouse without the spouse’s consent, usually in a prenuptial agreement. In most jurisdictions, a surviving spouse has a right of election, which allows the spouse to take a legally-determined percentage (up to one-half) of the estate when he or she is dissatisfied with the will. Children may be disinherited, but this preference should be clearly stated in the will in order to avoid confusion and possible legal challenges.
3. Kinds of Wills. Following is a brief glossary of various kinds of wills:
3.1. Simple will. A will that just provides for the outright distribution of assets for an uncomplicated estate.
3.2. Testamentary trust will. A will that creates one or more trusts to be funded with estate assets.
3.3. Pourover will. A will that leaves some or all of a person’s assets to a trust established before death.
3.4. Holographic will. A will that is unwitnessed and is in the testator’s handwriting.
3.5. Oral will (also called nuncupative will). A will that is spoken, not written down.
3.5. Joint will. One document that covers both a husband and wife (or any two people). These are often a big mistake, and we highly recommend that you not write such a will.
3.6. Living will. This is a document which generally expresses a person’s desire not to be kept alive artificially if he or she has suffered substantial and irreversible brain damage. It may also provide other directions for a person’s medical care. This is not a will, so it is a bit of a misnomer.
3.7. Codicil. A codicil is a change or addition to an existing will. It must be executed with the same formalities as an original will. The purpose of a codicil was to avoid rewriting or retyping the entire will just to change a small portion of it. Today, with word processors, codicils are very rare.
4. Property Subject to Disposition by Will. All “property” is either real property or personal property. Real property is land and permanent structures erected on the land. Everything else is personal property. In turn, personal property is divided into tangible personal property and intangible personal property. A car is tangible personal property. A debt that is owed to you is intangible personal property.
Only “probate” property is subject to distribution by a person’s will. For this purpose, the term “probate” means property in the decedent’s name alone with no beneficiary designation. An example of probate property would be a share of stock in the decedent’s name alone. The only way to know who inherits that share of stock is to read the decedent’s will. Non-probate property is property which has a beneficiary designation. Examples are life insurance, bank accounts that are joint or “ITF”, securities accounts that are joint or “TOD”, IRA’s and annuities with death beneficiaries.
5. Intestacy. If you die without a will, you die “intestate.” In New York, there is a law that provides who inherits from a person dying without a will. The rules can become quite complicated.
The short version (in New York) is that if you die with a spouse and no children, everything goes to the surviving spouse. If you die with children and no spouse, everything goes to your issue (discussed below) by representation (also discussed below). If you die with a spouse and issue, the first $50,000 goes to the surviving spouse and everything else goes one-half to the surviving souse and one-half to your issue. If you die without a spouse or issue, then everything goes to your parents. If no parents, then to your brothers and sisters, or if any of them predecease you, then to their issue. The scheme continues quite a bit further with certain restrictions.
6. Issue, By Representation and Per Stirpes.
The term “issue” means all of a person’s blood descendants, namely, children, grandchildren, great-grandchildren, etc.
The term “by representation” means that children will inherit from a parent in equal shares. If any one child dies before the parent, then the share that that child would have received will instead go to that child’s children. However, if more than one of the children die before the parent then the shares that go to grandchildren will be divided among all the grandchildren equally. If a child dies before the parent and is not survived by the child’s children, then the share that would have gone to that child will be distributed equally among the parent’s other children.
The term “per stirpes” means that children will inherit from a parent in equal shares. However, if any child dies before the parent, then the share that that child would have received will instead go to that child’s children. If a child dies before the parent and is not survived by the child’s children, then the share that would have gone to that child will be distributed equally among the parent’s other children.
7. Appointment of Guardian for Minors. In your will you can nominate those persons whom you want to act as guardians of the person, property, or both, of your minor (in New York under 18) children.
8. Creation of Testamentary Trusts. In your will you may direct the creation of a trust. See other parts of this site for a discussion of trusts. For example, if you have minor children, you may direct that any child under a certain age who takes under your will will receive his or her share in trust rather than as an outright distribution. Such trust could provide that the trust has the obligation to provide for such child’s support, education and health until some age when the trust will terminate and the child will receive whatever is left in the trust.
9. No-Contest Clause. A will may include a no-contest, or “in terrorem”, clause stating that a beneficiary who contests your will automatically forfeits anything he or she would otherwise have received under your will. Of course, this will only be effective if such person is to receive something under your will.
10. Updating a Will. Following are some events that may warrant a reexamination of your will and your planning in general:
(a) significant change in health
(d) establishment or breaking apart of a domestic partnership
(e) significant change is assets, either in quality or quantity
(f) change in federal or state tax laws
(g) change of residence to a different state
(h) death of a spouse or domestic partner
(i) birth or adoption of children
(j) likelihood of significant inheritance
(k) fights had with friends and family named as beneficiaries in your will