HOW DOES THAT DIFFER FROM AN ESTATE PLAN?
Many websites promise to let you make your own Will quickly and easily online, and then download it for printing. Is this a good idea? Do you know enough about Wills, Trusts and Probate to know what your legal options are? Do you know how to sign your will properly so that it will be legally enforceable and easily probated without your witnesses having to testify after your death?
WILL BASICS
First, let us review some basics about Wills. Your Will is a written document by which your estate can re-title your assets at death. It lets you decide and list who gets what. You can give specific items to certain persons and you can choose which friends, relatives, charities, entities or institutions, or even strangers (all called “beneficiaries”), should receive a share of your assets. A Will allows the court to re-title everything that you own in your own name, including assets acquired after the Will was made.
The Will is subject to change by you during your lifetime as long as you are mentally competent (unless it is a joint or mutual Will). Although it is not a document that is recorded during your life, upon your death, the Will is filed with the probate court.
A Will allows you to leave property to whomever you choose (including to companions, lovers, or partners, regardless of marriage; to foundations; or to noncitizens). You can provide alternate beneficiaries to inherit in the event the first person named in the Will dies before you or fails to survive you by a specified number of days. It allows you to revoke prior Wills and to nominate a Personal Representative (a.k.a. Executor) to ensure that the terms of the Will are carried out.
Through a Will, you can leave property to minor children (whether your own or not) or grandchildren, and can state a case for the appointment of a personal guardian (other than the child's remaining natural parent) to care for your minor children. You can choose the best method to manage property left to a minor or young adult (e.g., through a children's trust or via the Uniform Transfers to Minors Act), provide for disposition of the property upon simultaneous death of you and your beneficiary (or spouse), exclude or disinherit relatives, direct the distribution of personal property, give away pets as well as funds to care for pets, provide for property not yet received at the time the Will is executed, and specify organ donations or funeral and burial (or alternative) arrangements for the disposition of your body. Other functions of a Will might be to specify how costs and taxes are to be paid, give property free of liens, and forgive debts.
A Will cannot dispose of property that you no longer own or control at death. Before death, you can give property away or sell it, even if it is mentioned in the Will. Nor can the Will dispose of property that you are legally bound to transfer by other means. For example, you cannot, by Will, dispose of property held in joint tenancy with right of survivorship to a person other than the joint tenant, or leave proceeds of a life insurance policy to someone other than the beneficiary named in the policy. The same rule applies with regard to assets in a Living Trust, to pension plan or retirement benefits (be they public, corporate, or private individual retirement accounts), and to bank or brokerage accounts with a trust designation. This is because you, by naming a beneficiary in each of these documents, have contractually disposed of that property already, in accordance with the designation. These items are not subject to disposition by the Will (unless the estate is named as the beneficiary), and if they are included in the Will anyway, they are not affected by it.
You cannot put unreasonable conditions on a gift in your Will, such as making the gift contingent on the beneficiary's marriage or divorce, or on the beneficiary's change of religion, because such conditions are void as against public policy. Such attempts to encourage or restrain certain types of beneficiary conduct will be ignored by the courts and the beneficiary will be entitled to the gift free of conditions. Nor can you, by Will, leave money for an illegal purpose or direct that something illegal be done. For example, money or property cannot be left directly to an animal because animals cannot legally own property. The Will cannot designate a particular attorney to handle post-death matters, although you can informally indicate a preference for a lawyer.
ESTATE PLAN
An estate plan likely includes a Will but contemplates something much more comprehensive, addressing far more than just the disposition of assets at death. It is an orderly plan designed to transfer assets both during life and at death through such means as living trusts, testamentary trusts, life insurance contracts, and joint tenancies and other ownership documents. Documents possibly needed for a full estate plan include a Will, trust agreements, powers of attorney, deeds, beneficiary designation forms, retirement benefit elections, pay-on-death instructions, a marital agreement, a preneed guardian declaration, a living Will, and a health care surrogate designation.
An estate plan provides for effective accumulation, growth, and retention of assets during your lifetime and for disposition of assets at your death in accordance with your objectives. In other words, it is a method for you to maximize control of property during life and to take advantage of the law to dispose of the property at death as inexpensively as possible. In estate planning, the attorney usually works as a team member with the accountant and financial planner to draft requisite documents to meet your needs and accomplish your clearly identified financial goals.
An estate plan is designed to help you accumulate assets economically and efficiently during your life to ensure that lifetime needs are met (such as college tuition and retirement funding), and transfer your assets both during life and at death to result in reduced income, estate and gift, and inheritance taxes as well as reduced administration expenses, all within the framework of your objectives. With an estate plan, you can avoid probate altogether, can minimize losses from forced liquidation of property, and can maximize protection and flexibility afforded by trusts or other devices for beneficiaries. An estate plan can provide for a disadvantaged child, establish a scholarship fund for a grandchild, handle potential problems arising from a subsequent marriage when you have children from a first marriage, and arrange for charitable gifts. It can be relatively simple or quite complex, depending on your family, assets and growth potential, and desires.
For most people with modest amounts of property, a Will adequately solves all of their estate planning problems because their estates probably will be subject to neither federal estate tax nor substantial probate fees. A simple Will may be appropriate for you now but require revision and incorporation into an overall estate plan later when you accumulate more property and/or begin a family.
Even if you postpone more extensive estate planning, you should at least have a Will to achieve the basic goals of distributing property to your beneficiaries of choice, and designating a Personal Representative (a.k.a. Executor). If need be, a Will can be prepared for you for the short term while you engage in more extensive estate planning. When the full estate plan is worked out, the interim Will then can be carefully revised to coordinate with the overall plan.
It is the attorney's responsibility when consulting with you regarding a Will to determine and advise you if the Will document, by itself or in conjunction with a power of attorney and health care advance directives, will be sufficient to accomplish your objectives. If it appears to the attorney that a Will cannot adequately satisfy your present needs, the attorney should recommend other estate planning measures for you.
If you live in Florida and would like to consult with Zana Holley Dupee or another attorney regarding your estate planning alternatives, call Bogin, Munns & Munns, P.A. at (352) 332-7688 in Gainesville or (407) 578-1334.