Updated: July 15, 2022
Many people delay the process of creating a Last Will and Testament. Sometimes they do not think they have enough assets to worry about or they are avoiding the thought of considering their own passing. While these hesitations are common, they should be overcome for the sake of your loved ones and beneficiaries. In the event of your untimely death, a last will and testament protect your wishes, and most importantly, protects your grieving loved ones from a difficult or expensive probate process. Therefore it is a good rule of thumb to have a last will and testament no matter your stage in life. Contact a lawyer at Monahan Law Firm today, in order to begin the legal process of creating your estate planning documents.
What Is A Last Will and Testament
A Last Will and Testament are commonly portrayed as legal documents that the very wealthy use to direct the distribution of assets amongst their beneficiaries, but an estate plan is so much more than that and is beneficial to every person.
A Last Will and Testament is a letter of instruction that outlines your estate plan for how your assets should be distributed and cared for after your death but is also useful in various other situations. The assets that are covered include real estate, personal items, digital assets, financial accounts and debts, trusts, and any other entities owned by the individual.
Beyond this well-known function, a last will and testament can establish other wishes. It can name caretakers and guardians for any minor children or pets, or detail the needs of a spouse. It can list any gifts or donations you would like to make upon your passing. A will can also list any funeral plans or burial instructions for the deceased person. The testator (the person writing the will) also appoints people to oversee the execution of their wishes.
When creating a last will and testament, ask an attorney if other forms of wills or estate asset protections could be right for you. If creating a will with a spouse, ask about joint wills versus separate wills. If preparing for the onset of the disease, ask about a living will or a living trust. Living wills are useful in circumstances where a person may not be of sound mind and body and would like to appoint a power of attorney or grant medical powers to a caretaker.
Essentially, a will can have many functions other than just dividing estate assets. However, in this article, we will discuss the three most important parts specifically pertaining to a Last Will and Testament. For further questions about your unique situation, contact an experienced estate planning attorney.
A bequest is a technical term for a gift given by a will. The gift may be to a person or to a charitable organization. The gift may be a specified dollar amount or physical property. Overall, there are four main types of bequests:
- Pecuniary Bequest - a fixed sum of money from the estate designated to a beneficiary
- Specific Bequest - a specific property that is named and gifted to a specific person or organization
- Contingent Bequests - a gift to be made provided certain conditions are met. The condition or event fails to transpire, the gift is not given
- Residuary Gifts - gifts distributed from what assets remain after all other bequests are met and all debts and expenses are paid. Usually described as a percentage or share of the residuary estate
Appointments of Independent Executors, Guardians or Trustees
Another important part of a last will and testament is the appointment of each estate administrator: executors, guardians, and trustees. The testator appoints someone for each of these administrative roles in the will. Each of these administrators has a different function for aiding the process of executing the terms of the last will and testament.
An estate executor is a party responsible for executing the administration of the deceased's assets. This is the person who will ensure that assets are distributed according to the terms of the will. Although the main function is to make sure the beneficiaries receive their portion of the estate assets, the executor is also responsible to:
- Collect all of the assets of the deceased
- Keep the assets safe until they can be distributed
- Settle any debts
- Initiate the probate process and legal proceeding
- Contact any person named in the will
- Resolving and closing any ongoing affairs, such as bank accounts or memberships
- Continue any regular payment of estate expenses, such as a mortgage payment
- File a final income tax return on behalf of the deceased
- Only when all of the above is handled, then the executor begins to fulfill the wishes of the asset distribution
The executor role can be overwhelming and time-consuming. It is a highly-regarded and honorable role to overtake. It requires honesty, fairness, and diligence. An attorney can provide expert advice to the executor through the process to ensure all legal requirements are met and that they are minimally liable.
A guardian is a person named in the will as responsible for the care of minor children or an incapacitated adult child. They assume decision-making authority during and after the probate process. This means they will be the caretaker and have parental authority over a minor child until they reach 18 years of age and over an incapacitated adult for the rest of their life.
As the future well-being of your loved ones is of utmost importance, you must carefully choose who to appoint in such a position. An estate planning attorney can help advise you on who may be a fit candidate for this role.
A trustee is another critical administrative role that is appointed within a last will and testament. A trust is a relationship between a grantor (in this context the person writing the will) and a trustee, in which the trustee is responsible for managing assets in the interest of a third party, the beneficiary. To simplify, instead of handing over the responsibilities of a portfolio of different properties or financials directly to beneficiaries, a grantor would appoint another party of financial expertise to manage the portfolio and ensure that the beneficiary receives the benefit. Trusts are used to protect assets and can preserve the inheritance by avoiding or reducing taxes.
Administration of Assets and Property
The third most important part of a last will and testament is the actual administration of assets and property. Who receives what is generally the primary function of the will.
A will can be viewed as the transfer of ownership from the deceased to another living beneficiary. Anything belonging to the testator, real property, personal property, digital assets, retirement funds, debts, taxes, and entities can be left to an heir or organization. The type of asset, the amount of the asset, and the specific recipient are covered in this portion of the will. How and when the receiving party obtains the asset can also be detailed.
For example, if you have a college tuition fund for a child that you would like to be administered per semester contingent upon the requirement that they maintain a certain GPA, you would list the exact amount, name the specific child, the expected grade minimum and outline how the funds should be transferred. This also applies to bequests for charitable donations, the division of property between families, and the distribution of trusts and inheritances to beneficiaries. The executor will ensure that all assets and properties listed are distributed according to your wishes. In the state of Arizona, if all properties and assets are covered in the will, the family does not have to enter probate court.
It's important that the administration of property and assets is thorough and detailed in order to prevent conflict amongst family members and to avoid the burden of having your survivors try to assume your wishes. A solid estate plan for how assets should be administered can also prevent people you do not wish to leave anything from attempting to lay claim to any of your assets. It is a protection of your property from ill-doers and the state on behalf of your family. An estate planning lawyer will ensure all your bases are covered and that your estate plan is legally binding.
Understanding the important parts, the function and purpose of a last will and testament are essential to leaving a strong legacy. It is never too early to create an estate plan. You deserve the peace of mind of knowing your loved ones and your assets are protected in the event of your passing. You can update and evolve your will with any life changes, so having a strong relationship with your estate planning attorney is a key part of the process. At Monahan Law Firm, we pride ourselves on our experience, communication, and dedication to our clients. Contact us today for all of your will and estate planning needs.