Creating A Will
A will is an important legal document that distributes your real and personal property after you die. In addition to naming the beneficiaries, a will is also used to name a personal representative (also referred to as an administrator or executor) to handle a person's affairs after their death until the probate process is complete, name a guardian for any minor children, and possibly create a trust for people or organizations that the testator (the person making the will) cares about.
There are many very good reasons for creating a will and an estate plan -- the most compelling is to ensure that one’s wishes for his or her loved ones, possessions and assets are carried out after they pass away.
I know it sounds crazy, but I feel that if I make a will, I am admitting that I may die. Is this a common sentiment?
Yes. Most people have a very real hesitation to formally document in writing via their will or a trust, what will happen to their children, their home, their possessions and their money when they die. Almost without exception, however, upon completing the process, most people feel an overwhelming sense of relief that this “big thing” is taken care of and they do not have to worry about it any more and can get on with the business of living.
An estate consists of all of a person’s property, which may include real estate, personal property, bank accounts, furniture, automobiles, stocks, bonds, life insurance policies, retirement funds, pensions, etc. If planned well, an estate plan including a will can distribute property with minimal loss attributable to administrative fees and taxes, as well as minimal stress on surviving loved ones.
A will is simply a written document in which a “testator” (a person that makes a will) designates what is to be done with his or her property when he or she dies, usually naming a personal representative (also called an administrator or executor) to handle their affairs and to ensure that the terms of the will are carried out.
Note that not all of one’s “estate” will necessarily be distributed to his or her beneficiaries via a will. Property that is owned jointly with others (such as bank accounts or real estate), or property that has a beneficiary designated (such as a pension plan, 401(k), or life insurance policy) or property in held in trust, generally pass to the beneficiary or other owner that is designated through each instrument. Even so, a will is a vital part of an estate plan as it can act as a safety net to “catch” any property that would otherwise not pass via joint tenancy, beneficiary designation or trust.
A trust is way of having title to property held by one person (“trustee”) for the benefit of another (“beneficiary”). There are many different types of trusts, some are created while the “trustor” (the person creating the trust) is alive, for the benefit of themselves or another person(s). Other trusts are created after a trustor dies by virtue of the arrangements made in their will. Some trusts are used to reduce tax liability.
Technically, no, but in reality, absolutely! While there are many online services and providers of “do-it-yourself” will kits, software programs and printed forms claiming that you do not need an attorney to create a will, these services and forms create a generic will that is not customized to a person’s individual situation or the requirements of the laws of the state in which the person resides. The risk of creating an invalid will or a will that does not accomplish what the testator really wanted is a very real possibility in all but the simplest of cases. Therefore, it is strongly recommended that anyone interested in making a will work with an attorney in creating it.
You have spent a lifetime creating your circle of loved ones as well as your estate. Investing in effectively planning for both after your passing is well worth the effort.
The benefits of using an attorney include:
- a will and estate plan drafted to meet your personal wishes and the requirements of your state
- minimizing the risk of litigation, contested wills, and other problems in transferring property to heirs
- minimizing the imposition of fees and costs on your estate
- better understanding of how your assets are held (sole owner, joint tenancy, etc) and what the resulting ownership issues will be when you pass away
- revisiting beneficiary designations
- better understanding of how your will will be executed
- an experienced legal professional takes responsibility for the content and execution of the document
Property that does not need a will and a probate court’s involvement to transfer title or ownership, such as property held in joint tenancy or property with a beneficiary designated, simply passes to the remaining joint tenants or designated beneficiary(ies). Examples of joint tenancy, would be bank accounts or real property held jointly between 2 or more people. When one of the joint tenants dies, ownership automatically passes to the remaining joint tenant(s). An example of a beneficiary designation that does not require a will, would be a life insurance policy. When the named insured dies, the life insurance benefit would then pass to whoever was named as a beneficiary on the policy.
The story is much different however for property that is owned in such a way that there is no “automatic” transfer upon the owner’s death, such a property that is held only in the owner’s name. In this case, if the owner dies without a will, then the property would pass to the owner’s surviving family members via a distribution pattern set out by law called “intestate succession”. Just one example of a situation in which this might present some problems is when a person remarries and dies leaving children from a prior marriage. Having a will or trust in place in this situation is especially important.
Many times this may mirror what the owner would have intended, but if the owner had wanted to include non-family members or organizations as beneficiaries (or alternatively “disinherit” a family member) this would not happen via intestate succession.
Generally, the following items can and should be included in your will:
- the disposition of all of your property, including real estate, personal property (such as family heirlooms and items with sentimental value as well as furniture, cars, etc.), stocks, bonds, cars, etc.
- a personal representative to administer the estate
- appointed guardians for any minor children
- the creation of a new trust and/or the transfer of non-trust assets into an existing trust
First, find an attorney with experience in drafting wills and estate planning. Ask friends and relatives for the name of an attorney that they have worked with, or contact Cancer Legal Line for help in finding an attorney in Minnesota to help you.
Most attorneys will have you fill out a (lengthy) questionnaire regarding your wishes and the size and content of your estate. Be prepared to provide your attorney with the following information:
1. The contents of your estate.
You need to include all of what you own and approximately how much it is worth. If you are married, you need to determine what is owned by you alone and what is owned jointly with your spouse. Items that need to be covered include bank accounts, stocks and bonds, real estate, retirement accounts, pension benefits, vehicles, personal property, business interests and life insurance. Your estate plan will depend on the value of these items and what you want to do with them.
2. Who you would like to designate as your personal representative.
3. If applicable, who you want to appoint as guardians of your minor children,
4. The people and/or organizations who you would like as beneficiaries of your assets.
After meeting with you to discuss your plan, your attorney will draft your will. You should carefully read over the draft to confirm that it disposes of your property in a way that meets your wishes, making sure all of your requirements are covered. If you don’t understand anything included in the draft, ask your attorney to explain it to you until you do understand.
In order to finalize your will, your attorney will have you sign your will in the presence of two witnesses.
You do not need to store or file the document in any particular place, but it is usually recommended that you keep it in a fire-safe box if possible and that you tell your appointed personal representative where they can locate your will when it comes time to file it with the appropriate court. It is not always a good idea to keep your will in a safe deposit box unless someone who is a signer on the box survives you. The court will want to probate the original will and if it is not easily accessible, unnecessary expense may result.
Generally, a personal representative is the person responsible for managing the assets, paying the debts, collecting any money owing, paying expenses of, and filing tax returns as required, of a testator’s estate.
Spouses usually appoint each other as the personal representative. Most attorneys advise listing a second and third choice to avoid unnecessary court costs to appoint a successor personal representative in the event that the first choice is unable or unwilling to serve as personal representative.
Practically speaking, the person that you choose for this position should:
- Agree to accept the position
- Be honest
- Possess common sense and good judgment
- Be financially responsible
- Be located geographically close to the estate
Of course, a personal representative can and most likely should, avail themselves of the services of a probate attorney who can assist greatly during the probate process. Even so, you will want to choose someone who can perform the specific duties of the personal representative. These duties include:
- Getting the process started after the death of the testator
- Notifying heirs or beneficiaries of the estate proceedings,
- Creating an inventory of all of the estate assets, preserving them and managing them within the limitations established by the will
- Organizing and paying the debts of the testator’s creditors out of the estate assets (within the statutory requirements of the state)
- Filing the testator’s final income tax return and estate tax returns and pay taxes out of the estate assets
- If property remains after the debts are paid, distributes it to the appropriate heirs or beneficiaries
- Acting within Minnesota Statutes regarding the transactions authorized for personal representatives
Before naming anyone to this position, ask them if they would be willing to accept the position. If a person is unwilling, they may decline to take on the responsibility and the court will have to appoint someone else. It’s much more desirable to have that control yourself than to leave it to the court. It’s a good idea to include at least one alternate, and have a similar discussion with that person.
Some things to consider when deciding on a guardian for your children are:
- The relationship between the prospective guardian(s) and your children
- The desire of the prospective guardian to raise your children
- The ability and willingness of the prospective guardian to raise your children the way you want them raised
- The assets that you are able to provide and the resources that the prospective guardian(s) have available to them for raising your children
- How well your values match those of the prospective guardian(s)
- The ability of the prospective guardian(s) to keep your children together
Before appointing a guardian, make sure that the person you are considering is willing to take on the responsibility and has a genuine and deep concern for your children’s welfare. Discuss with him/her/them what it will take to raise the children in all areas concerned (educational, spiritual, physical, emotional, practical, etc.) and from where the resources will come.
I am worried that some of my children or family members will have their feelings hurt by decisions I make in my will about who I would like to have certain personal items---what can I do about this?
For an excellent discussion of this, the University of Minnesota Extension service has a program dedicated to the subject called "Who Gets Grandma’s Yellow Pie Plate". The website contains many articles dealing with the emotional aspects of estate planning, and there is a workbook by the same name available for purchase.
I want to convey so much more than material things to those I love. I want them to know what was most important to me in life, what I did to get through times of crisis, my guiding principles—is there a good way to do this?
Yes. What you are describing is a concept called an Ethical Will. An Ethical Will conveys your sentiments, values and beliefs in a document that you create for your loved ones. It is not a legal or binding document, but rather a written legacy of what you want your loved ones to take from the experience of your life. There is no right way or wrong way to create one or requirements that need to be included. Each one is as individualized and unique as its author.
There is much more information at the Celebrations of Life website about ethical wills and ideas for how to create your own.