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While it's difficult for anyone to contemplate their own passing, it's essential to have an estate plan in place. A will is a legal document that states how you would like your property and assets to be distributed after you die - it ensures that your estate is distributed according to your wishes, and it protects your family and the guardianship of your children. In this article, you'll gain a comprehensive understanding of what constitutes a will and why you need one now.
When Did Wills Begin?
The concept of a will is an ancient one with Egyptian origins. In Roman society, inheritance was virtually the only way to obtain wealth, and the "Testamentum" (testament) documented the distribution of property. Our modern version of the will is derived from the post-Norman Conquest when wills were enshrined in law. The word will, in the context of property distribution, is traced to the late 13th century.
Is there a Difference Between Will and Last Will and Testament?
The short answer is no. Last Will and Testament is simply the official wording for will. For the sake of brevity and simplicity here, we are using the word will.
The Meaning of Property in a Will
Your property is everything that you own at the time of your death and can be classified into two categories:
- Real property: Real estate, land, buildings, fixtures, improvements.
- Personal property: Cash, stocks and investments, life insurance policies, jewelry, furniture, cars.
What's in a Will?
To be considered a legally binding document, a will must contain specific language and meet state requirements. At a minimum, your will should:
- Be in writing, although some states recognize oral (nuncupative) wills under very specific circumstances. Nuncupative wills are accepted when made by someone in imminent danger of death, typically during wartime or other medical emergencies.
- Name an executor - the person who carries out your wishes and is given fiduciary responsibility.
- Designate guardians for your minor children.
- Include a statement that revokes any previous wills or testamentary trusts.
- Be signed by you and witnessed by two people who are not named in the will as beneficiaries.
State Inheritance Laws
While it's not required, we recommend working with an attorney to ensure that your will is properly executed and abides by all state requirements. There are two main forms of property law and one exception governing states:
1) Common Law is the system of law that's derived from English common law and is in place in 41 states. Under common law, property that is acquired during marriage is generally considered to be the sole property of the spouse who acquired it and whose name is on the title. A spouse is not automatically entitled to 1/2 the property of the other spouse upon death. However, in Common Law states, elective share laws protect surviving spouses irrespective of what is contained in a will. An elective share gives a surviving spouse 1/3 of the property and up to 1/2 depending on the outcome of a petition to the court.
Property obtained prior to the marriage is not subject to the same rules. Furthermore, a legal agreement (e.g., prenuptial) prior to marriage may exclude specific assets.
2) Community property is the system of property law that's in place in 9 states plus 2 U.S. territories: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, Wisconsin, Guam, and Puerto Rico. The Community Property system means that property acquired during a marriage is jointly owned by both spouses and will be divided evenly upon divorce or death.
3) Optional (elective) community property
Alaska, Kentucky, and Tennessee legislated property systems that don't fall perfectly into either of the above categories. While all three states follow common law, there is an option to create a written agreement between spouses in the form of a trust that confers an equal division of assets.
How to Create a Will
While there is a multitude of online self-serve templates to create your own will, we encourage you to consult an attorney for legal or tax advice. There is no one-size-fits-all solution. Everyone has their own individual wishes and assets that should be evaluated by a professional. An attorney will be well-versed in state laws and can provide invaluable direction.
How Much Does a Will Cost?
Attorney fees range between $300-$1,000 for a basic will. Naturally, if you have a complicated estate, the costs may be higher. The truth is that it's hard to put a price on the inner peace that comes with securing the future for your family.
When to Update Your Will
As life circumstances change, it's important to review and update your will periodically, especially after major life events like marriage, divorce, the birth of a child, or the purchase of a new asset. If you move to a different state, be sure to check if the laws governing wills in your new state to ensure compliance.
Why a Will is Vital
As the saying goes, the only certainty in life is uncertainty. That's why any opportunity to prevent uncertainty should be seized upon. A will should be at the top of your list as one of the essential arrangements you should make without delay. It's the cornerstone of estate planning. After all, we prioritize health, life, and car insurance to mitigate the consequences of uncertain outcomes. A will gives you peace of mind, fulfills your wishes, and protects your family in the future.
Consider the consequences of having no will. Passing on without a will is known as dying intestate. A probate court in your state will activate the probate process and then determine how your assets will be distributed - not you. The court will likely appoint a close relative to administer your estate, but that person may not be the best choice or the one you could have chosen if you had made a will. Above all, a will protects the interests of your minor children. Without a will, their custody may be placed in the hands of adults you would not have deemed the most capable of looking after their needs now or in the future. Beyond those considerations, dying intestate will unnecessarily burden your family and friends with court delays and extra costs that they don't need, particularly when they're grieving.
According to a Gallup poll, only 46% of Americans have a will. Even though the percentage increases with age, 24% of people over 65 years of age have no will. These are shocking statistics. 55% of people die intestate. Perhaps the fear of facing reality causes vacillation - the number one reason (40% surveyed) cited for not having a will is procrastination. Coming in second is the misconception that a person has insufficient assets to warrant a will - accounting for 33% of respondents. There's no reason to add to these statistics. Make an estate plan now.
Probate Court and Process
While state probate courts govern estates of those who die intestate, they are also very much a part of the process when you have a will. A probate court is a court of law that supervises the administration of estates. The process begins when the will is filed with the probate court in the county where the deceased person resided. The executor or personal representative will carry out the terms of the will and the court will ensure the executor's adherence to those terms. The probate process differs in each state but generally lasts between 3 - 24 months.
Where to Keep a Will - Heirloom Safe
Wills are traditionally kept in a secure location, such as a fireproof lock box or safety deposit box. You may also choose to keep it with your attorney. Heirloom Safe provides a cutting-edge ultra-secure cloud-based service where you can store a copy of your will and the multitude of other digital assets that you've accumulated. Deputize more than one person to access your Heirloom Safe digital vault, leaving instructions about where the original legally binding will is held and how to obtain it. Store online account passwords, financial documents, and precious photos.
Don't Delay - Make a Will and Secure it Now
It's imperative that you take the time to make a will to protect your interests and those of your loved ones. For a modest fee, you can ensure that your assets are distributed according to your wishes and that any minor children are taken care of by the adults you trust most. Don't put it off any longer - make a will today. Heirloom Safe can help you take care of all your digital assets, including your will. Our memberships provide the reassurance that your will is safely stored and easily accessible by those you trust. Sign up for Heirloom Safe today.