Last Will and Testament
Your Last Will and Testament is a legally-binding statement directing who will receive your property at your death. This seemingly simple concept is, in practice, subject to numerous exceptions and can involve complex issues. For example, the Last Will and Testament covers only “probate property”. The term “probate property” refers to that property which is included in a decedent’s estate subject to the control of the executor or administrator, used to pay the expenses of estate administration and the decedent’s debts, and distributed as directed in the Last Will and Testament (or by statute).
Many times property passes outside of the probate estate when the owner dies. For example, property jointly owned with right of survivorship, property held in trust, and property with a named beneficiary, such as IRAs or 401(k) plans, or insurance proceeds, often pass outside of the probate estate.
Why should you have a Last Will and Testament? Here are some reasons:
- With a Last Will and Testament you can direct to whom your probate estate will go after your death. If you die intestate (without a Last Will and Testament), your estate will be distributed according to your state’s law, which may or may not agree with your wishes.
- Many people try to avoid probate and the need for a Last Will and Testament by holding their property jointly with their children. This can work, but often exposes assets to additional risks and claims and can result in distribution of assets to unintended persons or in unintended shares.
- A Last Will and Testament facilitates the administration of your estate. Often the probate process can be completed more quickly and at less expense to your estate if there is a Last Will and Testament. With a clear expression of your wishes, it is less likely that costly, time-consuming disputes will occur.
- You choose the person to administer and distribute your estate according to your instructions. This person is called your “executor” (or “executrix” if you appoint a woman) or “personal representative,” depending on your state’s statute. If you do not have a Last Will and Testament naming a personal representative, the court will appoint someone, often the first person to request appointment.
- For larger estates, a Last Will and Testament can help reduce estate taxes as part of a comprehensive estate plan.
- You can appoint a guardian for your minor children.