Last Will and Testament Definition and Examples
A last will and testament is an estate planning document that describes and defines, among other things, what you want to happen with your property after you die. Your will contains all of the relevant information on who will inherit your property.
However, it may not be able to address all of your assets, and you have alternative estate-planning options. According to a 2020 study by Caring.com, 70% of those polled believe that having an estate plan is necessary, however the number of those who have done so has decreased by 12% from the previous year’s study. It can be useful to know what will happen to your estate if you don’t have a will.
What is the difference between a Last Will and Testament and a Living Will?
A last will and testament is a legal document that specifies when and how your property and assets will be distributed to your beneficiaries. It should also name your executor, commonly referred to as a personal representative. This is the person in charge of finalizing your affairs and navigating your estate through the probate process.
To transfer ownership of many of your possessions to a living person, you’ll need to go through the probate process. If you don’t have a will, you won’t be able to prevent it until you have an other estate plan in place, such as a living trust.
What is the Function of a Will?
A will can address a variety of topics. It should specify your major beneficiaries, such as the fact that you want your vintage automobile to pass down to your brother Joe. But it should go a step farther and specify who gets the car if Joe dies before you.
A will should also specify what rights you want your executor to have while settling your estate, as well as a guardian to care for your children until they reach adulthood if their other parent dies before you or in a common incident. Because minors cannot possess property, it can also name a conservator to oversee any assets or funds you leave to your children.
A will, on the other hand, can only deal with your probate assets—items of property that you own and can’t convey to a live person without going through the probate process. Beneficiaries are named directly in life insurance benefits, real estate held by joint tenants with rights of survivorship, and many retirement plans. By law, these non-probate assets will pass to those outside the estate.
Wills and Estate Plans: What Are They and How Do They Work?
A revocable living trust is another estate-planning tool that covers the same fundamental provisions as a will, but instead of an executor or personal representative, the person in charge of settling your final affairs is referred to as your successor trustee.
After you’ve established your trust and before you die, you must transfer ownership of your assets into the trust’s name so that the conditions of your trust and your trustee can deal with them. A will is required to “capture” any property you own that hasn’t yet been funded into your trust so that it can be transferred to your trust after you die. A “pour-over will” is the name for this form of will.
The probate process is required for the transfer of assets into your trust, but the provisions of your trust will govern which beneficiaries receive this property, as well as how and when they should receive it.
A pour-over will cover two points in particular: It appoints an executor to oversee the assets that have not yet been funded into your trust and orders that individual to do so.
State laws govern will requirements, and whether you’re making a simple pour-over will or a more sophisticated one, you must follow them. The probate court will not honor it unless it meets the standards for a valid will. The consequence would be the same as if you had died without leaving a will.
These rules usually dictate how many witnesses you must have at your will signing and how you must sign the paper. Many “invalid” wills are found void due to basic flaws in these sections.
To leave a last will and testament, you must also have reached the age of majority in your state—minors are unable to do so. You must be in good mental health. You cannot, however, disinherit your spouse.
You can’t use a final will and testament to force a beneficiary to do something illegal or something you believe is in their best interests, like graduating from college. Unless you live and die in Louisiana, you can disinherit your adult children.
Is it necessary for me to have a will?
If you do not form a will before you die, or if your will is found invalid by a court, the state you live in at the time of your death, as well as any other state where you own real estate at the time of your death, will effectively provide a will for you. Your probate property will be distributed according to state intestacy laws.
If this happens, your spouse’s inheritance from you could be limited to as little as half of your fortune. Intestate succession laws typically distribute your assets only to your spouse and living descendants. If you don’t leave a will and are survived by a spouse and children, your parents and siblings may not receive anything at all.
Important Points to Remember
- A last will and testament is a legal document that specifies who you want to inherit your property when you die.
- A will can also name a guardian for your children, a conservator to manage your children’s inheritances until they reach the age of majority, and an executor to oversee the probate procedure of your estate.
- Only probate assets can be transferred by a will. They are unable to leave assets with a beneficiary designation, such as life insurance proceeds, retirement funds, or real estate titled to joint tenants with rights of survivorship.
- Even if you construct and fund a living trust as the foundation of your estate plan, you’ll still need a “pour-over” will.