Most people understand the need for a will, but not everyone understands exactly what they are, their benefits, or their limitations. So what is a will, and why do you need one?
A will is an essential estate planning vehicle that enables you to dictate how you want your estate (the sum of all of your assets and liabilities) to be distributed upon your death. A will can establish asset distribution, guardianship for children, an executor for your estate, keep assets away from unwanted parties, allow heirs quicker access to assets, and enable you to leave your assets to charity. Regardless of the extent of your wealth, anyone who has assets and/or children should have a will.
Unfortunately, if you pass away without a will (dying “intestate”), the distribution of your estate will be left to the courts through a scheme known as intestate succession. Should you die intestate, your assets may not be distributed in a way that you would have desired. Dying intestate can also put emotional and financial stress on your heirs as they try to guess how you would have wanted your estate to be settled.
Creating a Will
There are very few legal requirements when it comes to a will. To create a will, you must be at least 18 years of age, understand your property ownership, and identify your property and who you want to leave it to. Once you’ve created your document outlining your property and beneficiaries, sign it, preferably in the presence of two witnesses. To make things easier at the probate of the will, you should have all of the signatures notarized.
If your financial situation, family dynamic, or personal preferences change, you can always revoke your will and replace it with a new one.
The type of will most likely to withstand any legal test is a testamentary will. This is what most people think of when they think of a traditional last will and testament. Although an individual can create a testamentary will, having an experienced New York estate planning attorney help you prepare your testamentary will can provide greater legal assurance.
A testamentary will must clearly and concisely set out (1) the maker of the will, (2) that all previous wills are revoked, and (3) that the maker is of sound mind and not under duress to make the will.
The document will further designate an executor, who is an individual appointed to manage your estate and carry out your final wishes when you die. The executor’s responsibilities include securing the will, initiating the probate process, identifying and appraising assets, paying debts and taxes, managing the estate, distributing assets to beneficiaries, and filing final accounting with the court. The executor’s role can be complex and time-consuming, so make sure you pick someone who you trust.
You should store your will safely, such as in a fireproof safe, and your executor and estate planning attorney should know exactly where it is and how to get to it.
If a will is written and signed, but not in the presence of two witnesses, it is called a holographic will. These are often used in emergency situations where there is nobody available to act as witnesses. While New Jersey recognizes a holographic will for probate, New York recognizes them only in a few select circumstances (such as when they are created by members of the armed forces during active service).
Because validating a holographic will can be difficult, we always recommend having a properly executed will with two witnesses as well as a notary.
Will vs. Trust — What is the Difference?
A will is essential for most people to transfer personal property to their heirs upon death, but there are many things that a will cannot do. In those cases, leaving assets in a trust may be more beneficial.
A will must go through the lengthy probate process and is subject to estate and other taxes and fees. It can also not be suitable for some types of property and assets.
Because a trust is a separate entity that can own assets, a trust will not be subject to the same taxes and fees that a will is. If you want to ensure that certain people get benefit of assets without having to pay large estate or gift taxes, these assets can be transferred to a trust which is then managed by a trustee and disbursed to beneficiaries after your death.
Now that you know the answer to the question “what is a will,” you are ready to start planning for your future. Our experienced New York estate planning attorneys at AJC Law are looking forward to helping you—contact us at (201) 273-9763 for a complimentary consultation.