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Write Your Will and Take it With You

Mon, 05 May 2008 18:52:57 GMT

A large number of retirees, and those who are planning on retiring, look to move to a new state to enjoy a different lifestyle than the one they had while working. This may involve new activities, moving closer to family and friends, or to enjoy a different climate. No longer are retirement communities strictly confined to Florida. In a recent survey by Bizjournals.com only 3 of the top 10 and 4 of the top 20 retirement destinations in 2007 were in Florida. Communities across the country are actively courting retirees.

Most persons nearing retirement age have actively started making plans for their estate, including creating a will. A legal question arises then if you move to a different state when you retire. If you have an existing Last Will and Testament and move, is your will still valid in your new state or will your heirs be forced to probate your will in your previous state? What if your will covers property in different states? The distribution of a person’s estate after their death is an area of state law and each state has their own rules about what a legal will must contain and how it may be executed.

Most states though do allow for the probate of a will which was written and signed in another state following that state’s law. This means that if you write your will in Michigan and then move to sunny Florida for retirement, Florida will accept your will in its court if it was valid under Michigan law or if its formation and execution conforms to Florida law as well.

Every state has its particulars but most state laws regarding wills follow some basic principles governing who may make a will and who may witness the will. The person making the will, the testator, usually must be an adult, and most states require two witnesses to the will, and the witnesses must know that the document the testator signed and that they are signing is a will. In some states, a will that is completely handwritten may not need to be witnessed. A handwritten will is called a “holographic” will and is valid in some states if the ‘material provisions’ of it are handwritten. Material generally means the part of the will that dispenses the person’s property. The basis for allowing a holographic will that was not witnessed is that the authenticity of the will can be determined through the handwriting.

Though the state may consider a will executed in another state valid and probate it, if some provisions in your will are invalid under the probating state’s law those provisions may be voided, even if they are valid under your original state’s law. One important area that states differ on is an interested witness. An interested witness is a witness to a will who also receives a gift from the will. Some states allow the gift, some states do not allow the gift, and some states allow the gift if the witness is a family member. Because a will is a legal document and states have different requirements you should always consult an attorney to discuss your particular estate planning needs.

for more information on wills, contact an estate planning attorney today.

How to Contest a Will

Thu, 20 Nov 2008 01:26:13 GMT

A will is designed to distribute property and assets in the way in which the deceased person intended them to be distributed. Accordingly, a will that is properly executed and that was created when the person was in her right mind and without undue influence is legally binding.

That said, there are times when a will is challenged in court. A will cannot be challenged simply because someone is unhappy with its contents and feels that the property should have been distributed differently. It can only be challenged if the challenger has standing to bring the matter to court, has valid grounds for the challenge and follows proper procedures for challenging the document.

Standing to Contest a Will

A person must have standing in order to contest a will. That means that a person must have a financial interest in the outcome. That financial interest does not have to be money. It can also be personal or real property. People with standing include those who would stand to benefit through the laws of intestacy if there was no will or a named beneficiary in the will. So, a child who is left out of a will would have standing to contest a will as would a friend who is named in the will but has no rights under the laws of intestacy.

Reasons to Contest a Will

The family member or will beneficiary who wishes to contest the will must do so for a valid reason, such as:

Mental capacity: the person contesting the will may argue that the person who made the will lacked the mental capacity to understand what he or she was doing when the document was drafted. In other words, the person making the will was not of sound mind. This is a hard argument to make because the requirement of mental capacity is not very difficult to meet.
Fraud or Coercion: the person contesting the will may argue that the person who made the will was unduly coerced or pressured into creating the provisions in the will.
Execution of the Will: the person contesting the will may argue that the will was not properly executed. For example, it can be argued that the will lacked the requisite number of witnesses and that it was not notarized.

If someone wishes to contest the will on those grounds then she will need to follow the proper procedures in probate court.

Procedures for Contesting a Will

If you have standing and a valid reason to contest a will then you will need to file the appropriate papers with the probate court in the jurisdiction where the will was entered for probate.

Different states have different statutes of limitations regarding contesting a will. Often, it is a very short amount of time because there is an interest in settling the estate quickly. The clerk at the probate court will be able to tell you how long you have to file suit. It is important that you file notice that you are contesting the will as soon as possible so that the will can be probated, the property can be distributed and the decedent’s legal matters can be finalized.

It is often important to consult with a legal estate planning attorney if you decide to contest the will. The court may decide that the will is valid as written, that the entire will is invalid or that only a portion of the will is invalid. A qualified attorney can help you navigate the probate court system and come to fair resolution.

How to Amend a Will

Thu, 20 Nov 2008 01:54:47 GMT

Sometimes a person executes a document that he believes to be his last will and testament. Assuming that the document is properly drafted and executed, the will that was created is the person’s last will and testament from the time it was drafted until the time that the individual dies unless the will revoked or amended by a properly drafted and executed codicil.

What is a Codicil?

A codicil is a document that amends a will but does not replace a will. It is meant to be used when certain provisions of the will need to be changed. A codicil can be used to add or revoke elements of a will. Any part of the original will that is not amended or revoked by the codicil will remain in effect when the person passes away.

Typically, a codicil is used to change relatively small and specific provisions of the will. For example, if an individual originally left her diamond ring to her daughter and then decided to leave it to her granddaughter instead of her daughter then a properly executed codicil could be used to accomplish that bequest. Similarly, if you sold or lost the ring after the time you drafted the will then the gift you made of the ring in your will would be void and unenforceable at the time of your death. So, you might wish to leave your daughter with another piece of jewelry or personal belonging. A codicil allows an individual to avoid going through the time and expense of executing an entirely new will to make these relatively minor changes.

Make Sure Your Codicil Has the Intended Effect

There are three things to keep in mind if you want to make sure that the wishes that you articulate in your codicil are honored. You must make sure that:

You are Specific and Clear in Your Intent: if there is a conflict in meaning between your will and your codicil then your previously drafted and properly executed will takes precedence and will control the distribution of your property. Therefore, it is important to be specific and accurate when using a codicil to amend your will.
Your Codicil Can Be Easily Located: your codicil will have no effect if it cannot be found during the administration of your estate. For this reason, it is in your best interest to keep your codicil with your last will and testament so that the documents can be read together and your wishes can be honored.
Your Codicil is Properly Executed: your codicil must be executed in the same way as a will must be executed in your state. Often, this means that 2 or 3 witnesses must be present and that you must state that you are of sound mind and have not been coerced into drafting the document. If your jurisdiction recognizes holographic wills then holographic codicils will also be recognized and enforceable.

A codicil is a useful document for relatively minor changes to your will. However, if you experience a substantial change in family relationships, such as a divorce or remarriage, then you might consider drafting an entirely new will to reflect your new family relationships.

When to Update Your Will

Mon, 26 Oct 2009 18:07:11 GMT

A will is an important estate planning document that describes how your property should be distributed after you pass away. Most people put a lot of thought into creating their will. They consider providing for their family, naming guardians for their children and supporting various charities, for example. They properly execute their wills and make sure that they are put in safe places where they will be easily accessible when they are needed. Once that is accomplished, it is easy to cross it off of the list of things to do and forget about it. However, a will is a document that should be periodically reviewed to make sure that it still meets your inheritance objectives.

Common Situations When a Will Should be Reviewed

A will should be periodically reviewed every few years to make sure that it still accurately reflects how you want your assets to be distributed when you die. It is particularly important to review your will when:

You get married: you likely want to add your spouse to your will when you get married. Some states require that a spouse inherit a percentage of your property regardless of a will but that may be less than you intend your spouse to inherit or, pursuant to state law, your spouse may not inherit anything.
You get divorced: in order to ensure that your ex-spouse does not inherit your property upon your death your will must be revised at the time of a divorce, assuming that your spouse was included in the will that you are revising.
You have children: when you have children you may wish to name a guardian and set up a financial trust for the economic well being of your children should you pass away before they reach the age of majority
Your children reach the age of majority: you may wish to change the amount that you provide for your children or change the way in which the money or property is provided to them when they become adults.
You have grandchildren: if you want to provide specific bequests of money or property to your grandchildren then your will needs to be revised to reflect the changes.
Your financial situation changes significantly: you may wish to provide for additional beneficiaries or add charitable beneficiaries to your will if your financial situation significantly improves. You may also need to revise your will to account for estate tax implications.
You move out of state: different states have different estate taxes and you may need to revise your will to account for the different tax structure. Therefore, it is important to have a local estate planning attorney review your will when you move to a new state.

How Can I Update My Will?

There are two ways to update your will. You can either legally revoke your previous will and execute a new will or you can execute a codicil to your existing will. Generally, if you are making small adjustments to your will then a codicil, or amendment, is a cost efficient and legally enforceable way to update your will. For example, if you now have a vacation home to bequeath then you may do so by executing a codicil to your existing will. A codicil must be executed in the same way that a will is executed in your state.

If you are making substantial changes to your will, such as including or excluding a person and significantly changing the allocations of your property then you may wish to revoke your will and execute a new will. An estate planning attorney can help you develop and execute a codicil or a new will based on what is appropriate for your individual situation.

How to Write Your Own Will

Thu, 11 Dec 2008 01:57:00 GMT

In order for your assets to be distributed according to your wishes at the time of your death, it is important that you have a valid will in place when you die. While in years past it was customary to go to your attorney to have a will drafted, there are several options available to you if you want to write your own will.

The Handwritten Will

In legal terms a handwritten will is known as a holographic will. In order for a holographic will to be valid and for the estate to be distributed according to the directives in that will a few basic criteria must be met. First, the entire will must be in the handwriting of the testator (the person making the will). A testator cannot use a fill in the blank style form and call it a holographic will. Second, the testator must have the mental capacity to create a holographic will. This requirement is the same for all types of wills and is not unique to holographic wills.

Holographic wills are not recognized in every state. Some of the states that do recognize holographic wills require that the wills be witnessed and other states do not have a witness requirement.

The Do it Yourself Will

Today it is easier than ever to draft a detailed will and testament without the expense of an attorney. For example, you could use an online form that asks you certain questions that you answer. Then, you can simply print your will and have it witnessed and notarized according to the laws in your state. Of course, you can also draft your will and seek attorney review which will be important in certain instances.

When to Seek Attorney Review

While the do it yourself option and the holographic will are legally acceptable options, you should know when to seek the help of your attorney. For example, if you have an estate that you estimate will be over one million dollars in value at the time of your death then it may important to seek the counsel of an estate planning attorney who can help you legally avoid costly estate taxes. Similarly, if you have complex family relationships or if you decide to cut out a close relative (such as a child) then it may be important to speak to an attorney who can make sure that your intentions will be carried out. If you have any doubt about either the contents of the will or its validity then it is recommended that you seek the counsel of an attorney.

If you do decide to seek the advice of an attorney, you may be able to save money on your legal fees by drafting the will yourself and having the attorney review it rather than having the attorney take the time to interview you and draft your will for you.

Drafting your own will can be financially prudent. However, you need to make sure that you are using a good online form, using a reputable do it yourself kit or, that you are following all the rules applicable to holographic wills so that your intentions will be honored at the time of your death.

Estate Planning Tools for Wealth Transfer

Mon, 26 Oct 2009 18:06:32 GMT

Proper estate planning does not leave all the transfer of all of your money and assets until the time of your death. Many people, particularly those who have enough assets to be subject to estate tax, must consider wealth transfers while they are living. Wealth transfers should be part of a systemic and organized estate plan that you develop with an estate planning attorney. Many types of wealth transfers allow you to continue to benefit from your assets while transferring ownership to others so that the assets are not included in your estate when you die.

Common Types of Wealth Transfers

Some common ways to transfer wealth include:

· Gifts: gifts of money may be made by a grantor at any time. However, gifts over a certain amount of money are taxed (in 2009, the amount was $13,000 per gift recipient per year).

· Irrevocable Gift Trusts or “Crummey Trusts”: a gift tax is imposed on gifts over the annual allowable amount. However, in order to be taxed the beneficiary of the gift must have a present interest in the gift. If the gift is placed into a trust to be distributed to the beneficiary at a later time then the beneficiary does not have a present interest in the gift and is not responsible for the tax. The beneficiary of a Crummey Trust must have the right to withdraw a contribution made by the grantor within thirty days. If that right is exercised then the gift may be taxed.

· Qualified Personal Residence Trust (QPRT): in order to create a QPRT, a grantor must place a personal residence into a trust and name a beneficiary such as a spouse, child or charity. The trust documents allow the grantor to continue living in the home rent free for a specific number of years. After that time has expired, the grantor must pay a fair market rent to continue to live in the home.

· Grantor Retained Annuity Trust (GRAT): a grantor sets up a GRAT by making donations into a trust. The trust documents provide that the grantor receives an annual payment, or annuity, from the trust for a certain amount of time. After that time period has expired, the remainder of the trust assets passes to the beneficiary who must be a family member of the grantor. This type of wealth transfer avoids gift taxes being imposed on the transfer.

· Family Limited Partnership (FLP): family members can contribute assets (typically income producing assets) to a family limited partnership. The partnership can have general partners and limited partners. Usually the older generations or people making the most significant contributions are the general partners and they maintain discretion over the partnership’s assets. The limited partners are typically the beneficiaries of this kind of wealth transfer tool.

· Charitable Lead Annuity Trust (CLAT): a donor puts assets into an irrevocable charitable lead annuity trust that pays a set amount of money to a charity annually for the term set in the trust. That term may be a set number of years or for the lifetime of the donor. At the end of the term, the donor, or his named beneficiary, is entitled to the assets remaining in the trust.

There are many ways to transfer wealth. Each individual has different needs with regard to transferring wealth that are dependent on the value of his or her assets and family needs. Therefore, it is important to consult an experienced estate planning attorney to develop a strategic wealth transfer plan to meet your individual needs.