Estate Planning Center
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Introduction To Estate Planning
Many people have the mistaken belief that estate planning is only for the rich and famous. All too often, the phrase "estate planning" is associated with jet-setting fashionistas with multi-million dollar mansions, chauffeured limousines, and all the so-called trappings of wealth.
You know, of course, that nothing could be further from the truth. The focus of estate planning is not about money, it's about people - the people we care about and love. That's what really matters! And, estate planning simply means taking the time to figure out how much your loved ones depend upon you for comfort, safety, an acceptable standard of living, and the attainment of certain other goals, and then taking the necessary steps to insure that those goals will be attained even though you might become incapacitated or die.
Money is important, to be sure. But, money is not the goal of estate planning, it is simply a means by which you can accomplish some - or all - of the goals you have set for your loved ones. First, however, it's important that you start by identifying your goals. When you do that, you'll quickly discover that certain goals require a sum of money and others do not. For example, insuring that your spouse will be able to maintain his or her standard of living in the event of your death is a matter of money. Making sure that your minor children are raised by the right people is not, although some consideration of the cost that might be incurred by a guardian should enter into the equation.
In the final analysis, estate planning really is that simple. And, its a logical process that you'll be able to address at your leisure, without the fear of anyone looking over your shoulder. Of course, if you're not an expert in financial analysis, or the legal aspects associated with estate planning, then obtaining the services of a professional may be appropriate and advisable. Then, when you've gotten to the point where you know what needs to be done, you'll be ready to put your plan into effect.
In this section, our goal is simply to acquaint you with some of the basic tools of estate planning, including a Last Will and Testament, a Living Trust, a Durable Power of Attorney, and Advance Medical Directives. In other sections, we'll explore each of these estate planning "tools" in greater detail. But, for now, a general overview will give you a good idea as to how these different tools can be very helpful in accomplishing your estate planning goals.
There are other "tools," as well, that can be employed when the situation warrants (for example, anirrevocable life insurance trust may be desirable if your estate is large enough to be subject to the federal estate tax; a charitable trust may be desirable if you plan to leave part or all of your estate to one or more charitable organizations; and, a limited partnership may be desirable if you want to shift some of the value of a business or real property to other family members in order to reduce potential estate taxes). But those tools - and a number of others - are designed to accomplish very specific objectives and, accordingly, are not appropriate for everyone.
For now, let's take a quick look at the basic estate planning tools named above; namely, the Last Will and Testament, the Living Trust, the Durable Power of Attorney, and the Advance Medical Directives. Then, if you'd like more detailed information about these basic tools, simply click on any of the menu items listed above or to the right.
Last Will and Testament
Historically, the work horse of all estate planning tools has been the Last Will and Testament. This, as you may know, is the document that allows you to designate the beneficiaries of your worldly possessions upon your death. It also allows you to designate the guardian or guardians of your minor children and the personal representatives of your estate.
Because a Last Will and Testament is the one document that virtually everyone should have as part of their overall estate planning, it necessarily follows that there is a huge amount of information about this estate planning document.
Accordingly, we have devoted an entire section to a detailed discussion of a Last Will and Testament, including: (1) FAQs about a Last Will and Testament; (2) Requirments for a Will; (3) Sample Wills; (4) Wills of the Rich and Famous; and (5) What the Experts Say.
In recent years, however, the revocable living trust has become a popular substitute for a Last Will and Testament, primarily because it allows your assets to pass to your designated beneficiaries without the expense and time-consuming delays of probate. While not for everyone, there is no doubt that the revocable living trust has become the cornerstone of modern estate planning.
Actually, there is a lot to a living trust, and we'll explore much of the in's and out's of living trusts - and even testamentary trusts - in our section entitled, "Revocable Living Trusts." Specifically, our Revocable Living Trust section includes such topics as "FAQs about Revocable Living Trusts," "Types of Trusts," "Selecting Trustees," "Funding a Trust | How to Fund a Living Trust," "Sample Revocable Living Trusts," and "What the Experts Say."
If you're considering a living trust as part of your estate planning, you'll want to take a look at our Revocable Living Trust section.
Durable Power of Attorney and Advance Directives
Unfortunately, estate planning in the 21st century is no longer concerned with just the prospect of dying. For many people, the threat of becoming incapacatated and not being able to attend to one's own personal and financial affairs is just as troubling. For this reason, the durable power of attorney and advance directives for health care have risen dramatically in importance in estate planning.
A power of attorney allows the person you appoint (your "attorney-in-fact") to act on your behalf. A power of attorney for financial purposes allows your attorney-in-fact to act on your behalf regarding certain financial matters that you specify in the power of attorney document. A power of attorney for medical decisions allows your attorney-in-fact to act on your behalf regarding medical treatment and medical procedures.
For more detailed information, please see our section entitled, "Powers of Attorney."
The term "advance directives" actually encompasses a number of different documents dealing with medical - as opposed to financial - issues. For example, it may include a health care proxy, a durable power of attorney for health care, a living will, a pre-designation of conservator, an anatomical gift designation, and other medical instructions. Each state will have specific laws regarding each of these documents.
For more detailed information, please see our section entitled, "Advance Directives."
So, if you're ready to explore these "tools" of estate planning in greater detail, simply click on any of the menu items listed above or to the right. When you click on any of these menu items, you'll notice that a sub-menu opens on the upper-right side of each page, giving you even more information about each of these estate planning tools.
You have the right to make decisions regarding your own medical care, including the right to refuse medical treatment if that is your preference.
However, if you are unable to make health care decisions because of a physical or mental condition, the question arises as to who should make those health care decisions for you. Should your personal physician make those decisions for you? Should your spouse or some other family member be given that power? Therein lies the problem that leads to the emotional - and sometimes legal - battles among family members when an individual is unable to make health care decisions for himself.
Most states recognize the right of a competent adult to make advance health care directives (commonly called "advance directives"), including the type of life-prolonging procedures that should - or should not - be provided under certain circumstances; the designation of another person or persons to make health care decisions for them if they can’t make them on their own; the designation of another person or persons who should be appointed as guardian or conservator, if necessary; and, whether anatomical gifts are desired.
In this section, we discuss the various advance directives that have evolved over the years, including health care proxies, the living will, the designation of a conservator for future incapacity, and the document for anatomical gifts.
Revocable Living Trust
Although a revocable living trust has been a useful estate planning tool for hundreds of years, there is no doubt that the revocable living trust has experienced a dramatic increase in popularity over the past several decades.
Newspaper advertisements for free seminars on the benefits of a revocable living trust are everywhere, as are television commercials suggesting that a revocable living trust is for everyone. You might even find a door-to-door salesperson who’ll tell you, without reservation, that a revocable living trust is something you just have to have.
Legitimate seminars on a revocable living trust and other legal topics are offered by attorneys and other professional advisors routinely in every city and state. After all, seminars are a legitimate way for professionals to promote their services and their expertise.
There are some promoters, however, who are less than honest and far from knowledgeable about estate planning issues. Whether intentional or not, these promoters do a disservice to the public because they often provide inaccurate and misleading information.
A revocable living trust can be an excellent tool for solving a number of issues confronting individuals and families today, including the avoidance of probate, the management of property during incapacity, the protection of property for beneficiaries who can’t handle money on their own, protection from disgruntled heirs, the elimination or reduction of federal estate taxes and state death taxes, and the assurance that personal affairs will remain private.
In this section, we’ll explore the ins and outs of a revocable living trust in some detail. To proceed, simply click on any of the sub-categories on the Revocable Living Trust menu to the right.
Power of Attorney
In the past, it was not uncommon for many individuals to be concerned with the prospects of dying, but few gave much thought to ever becoming incapacitated.
Today, the likelihood of becoming incapacitated has increased dramatically. Part of the reason is due to the advances in medicine. Indeed, the fastest growing segment of the population of the United States, according to government statistics, is people over the age of 65. And, no one would doubt that the risk of incapacity increases substantially with age. The U.S. Bureau of the Census estimates that as much as 47% of individuals over the age of 85 will develop Alzheimer’s disease, which generally results in incapacity.
But, there are other contributing factors as well. As our population density increases, the risk of incapacitating injuries from all sorts of accidents also increases. Moreover, medical advances now permit life to be prolonged indefinitely through artificial means.
Fortunately, the legal community is becoming more aware of the risks of incapacity and the attendant problems confronting incapacitated individuals and their families. In response, a number of new tools have emerged, which serve to combat the consequences of incapacity. These new tools include the revocable living trust, advance health care directives (including the living will), and the durable power of attorney.
In this section, we’ll discuss the durable power of attorney, a type of document that has become a standard estate planning tool for virtually all individuals in today’s economic environment.
Last Wills and Testaments
In this section, we'll describe a Last Will and Testament in detail, including the requirements for a Last Will and Testament, when you should make a Last Will and Testament, and what a Last Will and Testament can and cannot do for you and your loved ones.
First, it is important to understand that a Last Will and Testament is a legal document that allows you to (1) name one or more individuals or entities to manage your estate upon your death, (2) provide for the transfer of your property upon your death, and (3) name one or more guardians for your minor children.
Historically, a "last will" (or a "will") referred to a legal document that disposed of an individual's real property while a "testament" disposed of an individual's personal property.
Today, both real and personal property are disposed of under a single document; thus giving rise to the popular title of "last will and testament."
Requirements for a Last Will and Testament
Each state has its own requirements for a will, but all require that you be of legal age (referred to as the "age of majority") and of sound mind (i.e., having the ability to know and understand what you are doing). For example, most states require that you be at least 18 years of age in order to make a will. However, Georgia's minimum age is 14 and Louisiana's minimum age is 16. Some states also make exceptions if you are emancipated, or legally married, or serving in the armed forces. In addition to those requirements, most states also impose the following requirements:
a. That your will be in writing and signed by you. As the creator of your will, you are sometimes referred to as the "testator" if a male, or as the "testatrix" if a female. While most states require that your will be made in writing and signed by you, some states do authorize a holographic will (i.e., a written will that is not witnessed, but made substantially in your own handwriting) under limited circumstances. A number of states will relax the formalities if you are a soldier on active duty in a war zone. A minority of states even recognize the validity of a nuncupative will (i.e., a will that is made orally). Nuncupative wills are generally restricted to military personnel or merchant sailors. In addition, the amount and type of property that can be disposed of by a nuncupative will is somewhat limited. For a complete list of each state's requirements for a last will and testament, please see our section entitled, "Requirements for a Will."
b. That your will clearly identifies you as the creator ("testator") and clearly indicates that you are creating a last will and testament. From a legal standpoint, this is commonly referred to as "publishing" the will. A typical publication of a will would look something like this:
c. Although not a legal requirement, it's generally a good idea that your will revoke all prior wills and codicils made by you. That's because, if your will is lost or destroyed, or not legally valid, then the courts may admit an earlier will to probate, and the earlier will may be contrary to your wishes. However, even if your will does revoke all prior wills and codicils, you should also be aware that many states have adopted a doctrine known as "Dependent Relative Revocation," which allows a court of competent jurisdiction to disregard a revocation that was based on a mistake of law, as long as the court finds that the provisions of your prior will come closer to fulfilling your intentions than having no will at all. For more information on this doctrine, see our section entitled "Dependent Relative Revocation" below. See, also, an article entitled "Doctrine of Dependent Relative Revocation" by the law offices of Adrian Philip Thomas, P.A.
d. That your will be signed and dated by you in the presence of at least two witnesses. Most states also require that the witnesses be disinterested; i.e., that they not be related to you or be named as a beneficiary under your last will and testament. However, each state has its own requirements, so it's necessary that you check the requirements of your state. For example, some states, notably Pennsylvania, have abolished any requirement for witnesses. In addition, Louisiana requires both attestation by two witnesses as well as notarization by a notary public. In addition, "holographic wills" (i.e., handwritten wills) are generally valid without any witnesses; however, many states do not recognize holographic wills.
e. That your signature appears at the end of your last will and testament. If this is not done, any text that follows your signature will either be ignored or may invalidate the entire will. That your will clearly identifies one or more of the beneficiaries of your property. However, some states will allow your last will and testament if it just (1) revokes a prior will, or (2) revokes a gift made under a prior will, or (3) just names a personal representative (i.e., an executor or executrix).
While there is a fair amount of uniformity among all the states as to the requirements for a valid last will and testament, there may be important differences as well. For this reason, you should always consult the specific requirements of the state in which your will is to be created. A good place to start is our section entitled "Requirements for a Will."
Restrictions on a Last Will and Testament
As stated above, a last will and testament is an important document for several reasons: First, it allows you to (1) name one or more individuals or entities to manage your estate upon your death, (2) provide for the transfer of your property upon your death, and (3) name one or more guardians for your minor children.
While these are very significant and valuable benefits, it is important to note that there are some important restrictions as to what can be accomplished under a last will and testament. First, your will cannot require that a beneficiary commit an illegal or immoral act in order to receive a gift under your will. Second, your will cannot disinherit your spouse. All states have passed laws that allow a surviving spouse to receive the greater of the amount provided by statute or the amount provided under your will. Third, you are permitted to disinherit one or more of your children under your will, except in Louisiana. However, if you fail to mention one of your children in your will, most states will presume that you either forgot to mention your omitted child or you thought your omitted child was dead. In that case, most states provide that your omitted child (called a "pretermitted child" or "pretermitted heir") will be entitled to receive an inheritance from your estate equal to what that child would have received if you had died intestate; i.e., without a valid will.
What Happens to Your Last Will and Testament When You Die?
Upon your death, the normal practice is for someone to locate your will and present it to the court having jurisdiction over your estate. Normally, the court having jurisdiction over your estate would be a probate court (or similar court designated to hear probate matters) within the city or county in which you were domiciled at the time of your death.
Once presented to the court, someone (generally your surviving spouse, child or other family relative) will petititon the court for admission of your will to probate. At that point, the court will schedule a hearing to determine whether your will should be admitted to probate. At the same time, it will send notice of the hearing to everyone who might have an interest in your estate, including those individuals and entities specifically named in your last will and testament and those individuals who are your heirs-at-law. Your heirs-at-law are notified because, if your will is not admitted to probate, then your heirs-at-law might be entitled to a share of your property under your state's intestacy laws.
Many states will forego a hearing on the admissability of a will if all of the parties-in-interest sign a statement indicating that they do not object to the admission of the will to probate. In that case, the court will admit the will without a hearing.
If a hearing is held by the court, any party who has an interest in your last will and testament (referred to as "standing") is entitled to object to its admission to probate. If no objection is made, the court will admit your will to probate without a hearing. At the same time, the court will appoint a personal representative to settle your estate. In most cases, the court will appoint the individual(s) or entity(ies) you named in your will to serve as your personal representative. However, the court is not bound by your appointee(s) and may appoint a totally independent person or entity if it finds that one or more of your appointees are not suitable for one reason or another. If the court does approve your appointee(s), then that person or entity will be referred to as your Executor, if a male or an entity, or as your Executrix, if a female, although many states now prefer to simply refer to anyone serving in that position as your Personal Representative.
If an objection is made to the admission of your will, then the court will conclude the hearing and schedule another hearing to consider the merits of the objection. This hearing, which is commonly referred to as a will contest, is actually conducted as a court trial whereby both the proponents and the opponents of the last will and testament are able to present their cases in accordance with the proscribed rules of evidence and procedure. In most will contests, the proponents of the will are called upon first to demonstrate that the will meets all the requirements for a valid will; i.e., that the will is written and that it is signed by the testator and witnessed by two witnesses. At least one witness is called upon to testify that he or she did, in fact, witness the testator's signiture and that the testator declared the document to be his or her last will and testament.
However, many states now provide for a "self-proving affidavit" by the witnesses to the will, which is an affidavit made by the witnesses at the time the testator signs his or her will, which is then attached to the will. The self-proving affidavit attests to the fact that the testator signed the document in the presence of the witnesses, that the testator declared the document to be his or her last will and testament, and that, at the time of signing the will, the testator appeared to be of sound mind and memory and competent to make a last will and testament. If a state authorizes a self-proving affidavit and if the will includes a self-proving affidavit, then the witnesses to the will are not required to be present and give testimony during the will contest. For a sample self-proving affidavit, please see our sample will, entitled Simple Will - 1. You should also check our section entitled "Requirements for a Will" to check whether a particular state authorizes a self-proving affidavit and, if it does, whether a statutory form for a self-proving affidavit is provided. Most states that do authorize a self-proving affidavit will also provide a statutory form as well.
If, at the conclusion of the will contest, the will is ruled invalid for any reason, then the testator may be deemed to have died intestate (i.e., without a will). unless a prior will is then admitted as a valid will. If the testator is deemed to have died intestate, then the court will appoint an administrator to settle the estate and any property remaining after the payment of all debts of the decedent, all administrative costs, and all estate and inheritance taxes, will be distributed to the decedent's heirs in accordance with the "intestacy laws" (often referred to as the laws of "descent and distribution") of that state. For a complete list of the intestacy laws of each state, please see our section entitled, "Intestate Succession | State Intestacy Laws."
How to Revoke a Last Will and Testament
Your last will and testament can be revoked in a number of ways. The physical destruction of your will is one way of revoking it. If you deliberately burn it or tear it apart, or write all over it so that it becomes unintelligable, then most states will treat it as being totally revoked and of no force or effect. However, if your will is only partially destroyed so that only part of the text or a particular provision is crossed out, then many states will treat it as being only revoked as far as the destroyed portion is concerned. Still other jurisdictions will either ignore the attempt or hold that the entire will was actually revoked. What really matters is how much of the will remains and whether a court can determine whether it represents your wishes or not.
Your Last Will and Testament can also be revoked through the actions of someone else if you are incapable of physically destroying it on your own and it is done in your presence and the presence of witnesses. And, some states may presume that you intended to revoke your will if it was last seen in your possession and it cannot be found after your death.
Of course, you may also revoke your will by the execution of a new will. As stated above, most wills contain a provision that expressly revokes all prior wills and codicils previously made by a testator.
If your last will and testament is revoked, there is always the question as to whether you intended to revive a prior will; assuming, of course, that the prior will is still in existence. Some states hold that the complete revocation of a will automatically revives the most recent will, the theory being that you probably would want your property distributed in accordance with your most recent will rather than through intestacy; i.e., without a will. Other states, however, hold that the complete revocation of a will leaves no will in effect, the theory being that you probably would want your property distributed in accordance with the laws of intestacy rather than in accordance with your prior will. This is one of the reasons why it is important that you review your estate plan from time to time. You should also be familiar with the laws of intestacy in your state so that you know exactly who will get your property in the event you die without a valid will. For a complete list of the intestacy laws of each state, please see our section entitled, "Intestate Succession | State Intestacy Laws."
If you are divorced sometime after you execute your will, your last will and testament remains in effect. This is one reason why it is important to review your will when there are changes in your personal family situation. Many states, however, will treat your former spouse as if he or she had predeceased you. In that case, your former spouse will not be entitled to any gifts under your will.
Finally, if your last will and testament is accidentally destroyed by fire or water damage, or because it was inadvertently thrown away, many states will admit a photocopy of your will to probate. However, to admit a photocopy, there must be evidence that it was accidentally lost or destroyed.
The Doctrine of Dependent Relative Revocation
There is also an equitable doctrine in the law that tries to figure out whether you intended to revive a prior will when a later will is lost or destroyed. This equitable doctrine is known as dependent relative revocation. Under this doctrine of dependent relative revocation, the courts can disregard a revocation of your last will and testament if it is found that the revocation was based on a mistake of law on your part as to the effect of the revocation. For example, if you mistakenly believe that an earlier will that you made will become effective if you revoke one that you made later, the court may decide to probate the later revoked will if the court believes that it comes closer to fulfilling your intentions than not having a will at all.
The doctrine of dependent relative revocation also comes into play if you make new will and revoke on old will under the mistaken belief that the new will is valid. However, if the new will is found to be invalid for any reason, a court may apply the doctrine to reinstate and probate the old will, provided the court finds that you would prefer the old will to no will at all.
As you can see, there's quite a lot to think about when considering a last will and testament. But, don't worry. In this section, we'll break down the various issues involving a last will and testament into easy-to-understand language. To get started, we've divided our discussion of a last will and testament into the following categories:
- FAQs about a Last Will and Testament - If you have a question about a last will and testament, this is probably the best place to start.
- Requirements for a Will - Each state has its own requirements for a valid will. You can check the requirements for a last will and testament in all 50 states right here.
- Sample Wills - Sometimes it's helpful to see the types of wills that other people are creating. Select the sample last will and testament that comes closest to your personal and financial situation and take a look. We've even included a detailed description of each provision, together with optional ways of doing things. Just mouse-over the applicable text to display additional information via a pop-up window.
- Famous Wills | Wills of the Rich and Famous - We've included a copy of the last will and testament of a number of rich and famous people because these famous wills provide a glimpse into our own history and the lives of these notable people. They also provide valuable insight into the type of last will and testament that people have created over the years.
- What the Experts say - Here, we've included a few selected articles by experts in the field that address some of the more important issues concerning a last will and testament.
Applicable State Laws
While all states have similar requirements for the transfer of property upon death, there are some notable differences too.
In this section, we'll examine the laws of all 50 states in a number of important areas, including the following:
1. How Property Transfers upon Death
Contrary to popular belief, not all property passes through probate upon death. For a detailed explanation of how property actually does transfer upon death, please click here.
2. Intestate Succession | State Intestacy Laws
If you die without a will, you are said to have died intestate. The word "intestate" is derived from the prefix "In" (meaning "not") plus the word "testatus" or "testate" (meaning "to make a will"). Today, all fifty states have laws that spell out how property is to be distributed when a person dies without a valid will. These laws are generally referred to as "intestacy laws." In some cases, however, they are referred to as the "laws of descent and distribution," or as the "laws of intestate succession."
For a detailed explanation of the intestacy laws in each of the 50 states, please click here.