Wills

A last will and testament (or “will”) is a legal document which specifies how you wish your property to be distributed when you die, as well as other issue, such as who will serve as guardians of your minor children.  In Massachusetts and Rhode Island, you must be 18 or older, and be of sound mind and free of undue influences,  to make a will. In your will, you name a person — called your “executor” — who will have the responsibility to see that your wishes about the distribution are met.  Your executor will apply to and be appointed the probate court.

What are the requirements for making a will?

Your will must be in writing.  It must be signed.  Your signature to the will must be witnessed by two persons.

How do you change your will?

You may change your will at any time.  tearing up your will revokes it.  Making a new will automatically revokes any prior wills you made.  If you want to add or change only one part of a will, your attorney can draft a “codicil,” which supplements your existing will.

When should you change your will?

You normally should change your will — or execute a codicil — when you undergo important life changes in your life circumstances, such as marriage, divorce, the birth or death of children, changes in tax laws, or substantial changes in your wealth.

What happens if I die without a will?

If you die without a will, you are said to die “intestate.”  This means that your property will be distributed not according to your wishes, but according to a formula specified by state law.  For example, if you die without a Will and leave a spouse and children, your spouse and children will get pre-set fractional shares of your property.   Because there is no will, and therefore no executor appointed by you, the probate court will need to decide who will administer your probate estate.  That person is known as an “administrator,” rather than an executor.  If you die intestate and own a business, your business likely will need to be sold.  If you die without a will and have minor children, the probate court also will need to decide who should act as their guardians until they reach adulthood.  Because this involves a lot of court intervention, probate costs tend to be higher than when you die with a will.  Obviously, the unpredictability of dying intestate makes it something you want to avoid if possible.

Will having a will help you avoid probate?

No.  If you die with a will, the will must be filed with the probate court within a short time after your death, and your executor must apply to be appointed.  This begins the process known as “probate.”  Probate may take from one to two years to complete.  In addition, probate can be costly. Your estate — the legal entity that now holds all your property until it can be distributed to your beneficiaries — must spend money to hire attorneys, pay court costs, prepare an inventory of your property, file tax returns, and distribute your property to your benficiaries.   So, while a will does not avoid probate, it does avoid the problems that occur if you die without a will.

Does all your property pass through your will?

Not necessarily.  If you own property jointly with another person, it may pass to that person when you die, and it never becomes part of your probate estate to begin with.  The prime example of this is ownership of a house as joint tenants with right of survivorship.  Many other forms of property can held this way, and they do not become part of probate distribution.

Will having a will help avoid or minimize paying taxes?

It might, and it should if the will is properly drafted.  Generally, estate taxes are only a concern if you have substantial amounts of property  in your “taxable estate,” that is, in the millions.  If that is your situation, your attorney can draft a will that will minimize your expsure to the payment of estate and gift taxes.  For example, if you are married, you will want to take advantage of a unlimited deduction for married persons.

It is important to recognize the difference between your “probate estate’ and your “taxable estate.”  Your “probate estate” consists of any property you owned in your name alone when you died.  It would not include, for example, property you held as a joint tenant with right of survivorship.  Your “taxable estate” would include both the property in your probate estate and any other property in which you held any ownership interest at your death.  So a jointly owned house would not be part of your probate estate, but might be included in your taxable estate when it comes time to determine if you own estate tax.

Is life insurance a substitute for a will?

No.   Even if you have life insurance to provide for your family, how is your other property to be distributed?   If your life insurance is owned by you at your death, the policy proceeds will become part of your probate estate, and you need a will to provide how you want the proceeds distributed. of course, life insurance is an important tool to use in conjunction with a will.   You may have life insurance which is owned not by you, but by a family member.  When you die, the policy does not become part of your probate because you were not the owner of the policy.

Do you own too little property to justify making a will?

No.  Even if you do not have great wealth today, you do not know what your circumstances will be at the time of your death.  Also, a will is used for more than distributing property.  If you have minor children, a will is how you specify the person or persons you want to act aas their guardians.  If you die intestate, the probate could appoint someone as guardian that you would not have want to act in that capacity.

Is making a will expensive?

The cost of having an attorney draft your will depends on many factors, primarily how complicated your wishes are concerning the distribution of your property.  A simple will can cost as little as $400-$500.  The initial costs, such as attorney fees, should be balanced against the costly consequences of your drafting your own will which turns out to be invalid.

Is it wise to draft your own will?

Almost never.  Many companies tout do-it-yourself will kits at very low prices.  Unfortunately, any error you make in completing these “form” wills correctly may result in huge financial losses to your family when you die.   Given the relatively low cost of having an attorney prepare a will customized to your specific needs and wishes, do-it-yourself will kits are just too risky.