Documentation - Wills

Wills
A will is a written document or oral communication to specify who gets your property covered by that document when you die. It can also serve other purposes such as listing a guardian for minor children. Property left by a will normally goes through the probate process. The probate process can be timely, expensive and public.

A will has no legal effect until death. It may be revoked, changed or added to at any time before the creator's death, provided the changes are made strictly in accordance with the requirements set by law. Amendments to a will are called codicils, which can modify small provisions to a will such as the gifts listed under the will to who is named the executor. The executor (named in the will) represents the deceased in court. If no will exists or no executor is named, the court appoints an administrator for this purpose.

Legal Requirements
There are several legal requirements to properly draft a will. These are:
· Person must be at least 18 years of age
· Must be of sound mind
· Must appoint at least one executor
· The will must be signed and dated
· Will must be signed in presence of at least two witnesses (witnesses must be 18 and of sound mind. Also witnesses generally cannot be related or be the beneficiaries of the will).
· Must have at least one substantive provision (i.e., who inherits specific property)
· You must state the document is your will

Types of Wills
There are several different types of wills and it's important to distinguish the differences:

  • Simple will – This is generally the most common type of will that has been witnessed with all formalities required by state law.
  • Holographic or handwritten will A will that is handwritten without the presence of a witness. Very few states recognize these types of wills, and only in limited, specific circumstances.
  • Nuncupative or oral will This type of will is where an individual orally communicates his/her wishes. Oral wills are only recognized in a few states and usually only in emergency situations.
  • Testamentary trust will – A testamentary trust will sets up one or more trusts for the distribution of the estate at the time of death. See section below titled "Trusts."
  • Pour-over will This is used in conjunction with a trust, and brings over any assets that were not originally included in the trust to be poured-over to it by virtue of the will.
  • Joint wills or reciprocal wills – These types of wills are used when there are reciprocal provisions needed for the disposition of a shared property, if and when one of the included parties passes away.

Modifying or Revoking a Will
You may simply choose to revoke an old will by creating a new will or a codicil. The subsequent will or codicil must be executed with all of the formalities required for the proper execution of a will. Generally, all new wills should include some variation of the language that the testator "hereby revokes all previous wills and codicils heretofore made," indicating that it is the newly executed will that shall control the disposition of the testator's assets.

In some states, getting divorced automatically revokes property left to your former spouse. If you are mentally competent, you may also destroy the will whereby you revoke it; although this could lead to a "will contest."

Avoiding Will Contests
Successful will challenges are rare. The legal grounds for contesting a will is limited to proving the creator was either not of age or not of sound mind. A challenger must prove incapacity or that the will was procured by fraud, duress or undue influence.

A common vehicle to safeguard against a will contest is to include a "no contest" provision stating that anyone who contests the will shall take or receive nothing from the estate. This is usually enough to deter a contest

Powers of Attorney


Related Articles
  1. Retirement

    Advanced Estate Planning: Setting Up Your Will

    By Steven Merkel Your will is a rulebook for the distribution of your assets upon your death. Any person of sound mind and over your state's age of majority can draft his or her own will with ...
  2. Personal Finance

    4 Things To Consider Before Becoming An Estate Executor

    Executing a will takes more work than you might think. Make sure you are up to the task before agreeing to be an executor.
  3. Retirement

    How To Choose The Right Executor For Your Estate

    Making a careful choice now can save your heirs from a lot of problems later.
  4. Retirement

    Advanced Estate Planning: Using Trusts

    By Steven Merkel While making a will is one of the most important documents in estate planning, there are typically always a few items, property, or accounts that while they're included in your ...
  5. Personal Finance

    What To Do When You're Left Out Of A Will

    Discover the legal steps you can take if you are left out of a will and if fighting is worth the effort.
  6. Retirement

    Skipping-Out on Probate Costs

    Don't let bad estate planning lead to unnecessary costs and stress for your inheritors.
  7. Retirement

    Estate Planning For Canadians

    Trusts, wills, taxes and rules differ by country. Find out what you need to know about estate plans in Canada.
  8. Retirement

    Advanced Estate Planning: Executor Selection And Guide

    By Steven Merkel After your death, your executor or estate administrator will be responsible for following the guidelines listed in your will including conducting an inventory of your property, ...
  9. Personal Finance

    Living Trusts vs. Simple Wills: A Comparison

    A look at wills versus living trusts and when to choose one over the other.
  10. Retirement

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
RELATED TERMS
  1. Testamentary Will

    A testamentary will is a traditional will, sometimes referred ...
  2. Probate

    The legal process in which a will is reviewed to determine whether ...
  3. Non-Contestability Clause

    1. A provision in a person's will designed to stop beneficiaries ...
  4. Will Variation

    A provision that allows a surviving spouse and/or children to ...
  5. Testamentary Trust

    A legal and fiduciary relationship created through explicit instructions ...
  6. Living Trust

    A property interest created during a person's life that allows ...
RELATED FAQS
  1. What do we need to do to make an agreement for the purchase of the ownership shares?

    The house belonged to my grandparents who are deceased. In my grandmother's will everything was to be left to her 5 grandchildren. ... Read Answer >>
  2. What happens when a will and a revocable trust conflict?

    Learn why a revocable trust supersedes a will, but only for the assets held in the trust, when there is a conflict between ... Read Answer >>
  3. What should I consider when I select an executor for my will?

    The executor of a will is the person designated with the task of administering the will's instructions. The responsibilities ... Read Answer >>
  4. How do I handle the taxes 1099-R contributions?

    Total employee’s contributions on the 1099 R form are $18,822.00. Does the executor of the estate ... Read Answer >>
  5. Can policy benefits be paid out in 10, 20, and 30 year increments to its beneficiaries? ...

    I would like to know if I buy a $200k policy, and name my sons and/ or grandchildren as beneficiaries, can I specify ... Read Answer >>
  6. What is estate planning?

    Estate planning involves making plans for the transfer of your estate after death. Your estate is all the property that you ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center