Basic Elements of a Last Will and Testament

last-will

While the laws differ in each state and Wills can range in complexity, there are some basic elements to a Last Will and Testament. Here are some of the basic elements:

Beneficiary: The individual, group, or entity who will receive the property.

Executor: The individual who handles the property you are leaving behind. When you appoint this person in your Will, he/she is called a Personal Representative. If you die without a Will, the Court appoints an administrator, frequently a spouse or adult child, who will serve in the same capacity of handing all the paperwork, preparing assets, dealing with likely heirs, handling claims from creditors, making payments on outstanding debt, and other estate-related matters.

Clauses: Sections in your Will that organize the information in a specific order.

  • Opening clauses: Lays out basic information about who you are and sets the stage for following clauses
    • Introductory clauses identifies you as the person making the Will
    • Family-statement clause introduces and identifies the family members who you will refer to later in the Will.
    • Tax clause explains how the taxes of your estate will be paid.
  • Survival clause: This leaves everything in your estate to one named person. For example, married people do this to ensure that everything goes to the surviving spouse.
  • Guardianship clause: This appoints a guardian for your minor children; a successor should also be named
  • Giving clauses: These leave specific bequests, or property identified by name and description, to beneficiaries and explain what property goes to which person and under what circumstance.
    • Real property clauses give property to a specific property, such as giving your home to your sister or your jewelry collection to your daughter.
    • Personal property clauses have more explicit instructions, such as giving the Google stock to your brother but the General Motors stock to your sister.
  • Residuary clause: This leaves the balance of the estate, or everything leftover after the specific bequests, to beneficiaries. A residuary clause is essential for any Will so that anything you forget or that is acquired after you write your Will can be distributed.
  • Appointment clause: This identifies the person who will manage your estate, also called the executor or Personal Representative.
  • Fiduciary powers clause: This language gives your executor the power to serve as your executor, including any duties that go beyond the basic requirements in Indiana law.
  • Ending clauses: These include the legalities to meet statutory requirements so your Will is legal and valid, such as your signature, date, and witnesses.

Your Will can be as broad or as specific as you choose. Although, you want to avoid being too broad and leaving the terms of your Will subject to interpretation. Your witnesses cannot be anyone named in your Will. You need to be of sound mind when you create your Will and your witnesses should be of sound mind too. You should always consult an estate planning attorney to create your Will. Our attorneys would be happy to help you create a Will that will leave a legacy for you and your family.

Advertisements

What Can Estate Planning Do For You?

family-estate

Losing a loved one can make it impossible to accomplish even mundane tasks like cooking a meal or taking the garbage out. Each person has his own way of coping with death. Regardless of how your family and friends cope with death, there are steps you can take to make it easier on them. 

Estate planning can help you in the future and now. You can do things like plan out and pay for your funeral, pay off your mortgage, help your parents with their assisted living expenses, add a new wing to the church, or set up a foundation to continue your social justice efforts. Estate planning can also benefit you now. When you prioritize now, you can plan and save in ways that help you accomplish goals now and after you’re gone. 

Estate planning gives you the opportunity to integrate and organize your personal, professional, and estate goals. It allows you to preserve your assets for use now and in the future. You’re able to provide for your family, friends, and charities after you die. Estate planning can also ensure the efficient distribution of your estate and even save money when it comes to taxes, legal fees, and court costs. 

Each estate plan is different and there is no one-size-fits-all estate plan. Laws differ in each state and each person has his own specific needs and wants. There are, however, basic components that comprise most estate plans: Last Will and Testament, financial Power of Attorney, and Advance Health Care Directives. Contact our office to schedule an appointment to discuss your estate plan.

 

What is an “Estate”?

asset-liability

Most adults have an estate. Your estate is made up of everything you own at the time of your death. Your net worth is your assets minus liabilities. An asset is anything a person owns. It can include things like cash, annuities, vehicles, insurance, investments, jewelry, household items, real estate, rental income, retirement funds, bank accounts, stock certificates, lawsuit settlements, and lottery winnings. A liability is a debt or obligation to pay money to another person or institution. Liabilities include things like alimony, child support, car payments, credit card debt, student loans, mortgages, taxes, personal loans, and insurance premiums. It is a good idea to keep careful and detailed records of your assets and liabilities. Keeping this information with your estate planning documents will be a tremendous help after your death. It lets the Personal Representative know what assets you have and if you have any creditors. You can request a free packet from our website to help you organize your information in one place. 

Choosing a Guardian for Your Children

guardian-children

Determining who will serve as the legal guardian of your minor children is a huge decision. It is also a great responsibility for whoever agrees to be the guardian of your children’s health and well-being. The guardian of a minor is an adult who is legally responsible for the needs of your children until they reach legal age, eighteen. Appointing a guardian over your children is a legal action. Your children’s godparents do not automatically become guardians upon your death. You have to put the guardianship provision in writing in your Will. The guardian will be responsible for items like food, clothing, and shelter. He/she will also be responsible for managing any assets in the child’s name and for providing things such as education and healthcare. 

Choosing a guardian is difficult because of the responsibilities involved. Obviously, you want to choose someone who will care for your family the way you would. However, you also need to make sure you choose a person who will follow through on the commitment.  Consider some of the following factors:

Age: Do you want the person taking care of your children to be around the same age as you? How much experience does this person have? Is this person emotionally stable and able to care for your children during the critical time of your death?

Lifestyle: If you want your children raised in a certain religion, what are his/her religious views? Will it be a healthy and upbuilding environment for your children? Does the person have similar ideals as you when it comes to values and child rearing?

Child-rearing skills: Is the person good with kids? Does the person know where to find and seek help as needed? Will the person be able to address the emotional and practical needs of your children that result from your death?

Marital status: Do you want your children raised by two parents? Is the personality and flexibility of the guardian more important to you?

Compatibility: How well do your children get along with the proposed guardian? Do they like and respect this person? How do they act around this person?

Money skills: How well does this person manage money? Will he/she use the funds wisely to benefit your children?

Location: Is the person going to move into your home? Does he/she have a home that is well-suited for children? Is the person flexible to move or take time off work to focus on your children?

You should also consider how much you want to impose your expectations on the people who will become your children’s guardian. It might be a good idea to come up with the priorities you want for your children and a list of people who could potentially be good guardians. You should then approach these people and ask whether they are willing to serve as guardian under the conditions you lay out. You do not want to name someone without asking because he/she may refuse. Always discuss the expectations and responsibilities with a potential guardian before naming him/her in your Will. You may even want to put these expectations in writing so that you are both clear about your wishes. It is also a good idea to name an alternate guardian in case the person you initially name is unable to fulfill that responsibility. It may be that your initial guardian dies before you or life circumstances (such as health or a job transfer) render it impossible for him/her to serve. 

Choosing Your Personal Representative

choosing-pr
The Personal Representative, or Executor, is the individual who manages your property after you die. If you die without a Will, the Court appoints someone to administer your estate, often a spouse, child, or third-party administrator. Otherwise, you can decide in your Will who will serve as the Personal Representative of your estate. This person will pay your debts and make sure your assets are disposed of in a legal, efficient, and thoughtful manner. Some of the duties of a Personal Representative can include:

  • Guiding your Will through probate to verify it is accepted as valid. This would include defending the Will against any contests.
  • Collecting your assets.
  • Ensuring that the correct gifts are made to the right beneficiaries, such as the title transfer for your house.
  • Reviewing and evaluating any claims against your estate.
  • Selling assets to pay any valid claims.
  • Preparing and filing an accounting of all financial transactions with the court.
  • Distributing assets necessary to support your minor children, disabled relative, or aging parents.

Therefore, choosing someone to serve as your Personal Representative is very important.

The person you choose as Personal Representative needs to understand what is involved in fulfilling that role. He/she should be someone that you trust and that has integrity. You should consider your relationship with the individual and choose someone who knows you well enough personally and professionally to know how you would want things handled. You may also want to consider how well this person gets along with your family and how practical he/she tends to be. You want to choose someone who will be realistic and seek help when he/she needs it. You may want to avoid naming a Personal Representative with a conflict of interest because he/she may decide things that benefit others and harm your family. It might be good to consider his/her asset management skills with real estate and financial markets.

Choosing a Personal Representative of your estate is a highly personal and important decision. The above considerations can help you make the best decision for you and those you leave after you die.