What a Will CAN do; What a Will CAN’T do; and What a Will SHOULDN’T do.
Quite simply, a Will is something that every person should have. However, it is important to know exactly what a Will can do, and what a Will cannot do, and how a Will interacts with many other estate planning concepts. For most people, there will be other documents and items that also form part of your estate plan, such as powers of attorney, health care directives, Payable On Death (POD) designations, Transfer On Death (TOD) designations, beneficiary designations, or revocable living trusts.
A good starting point is to note one big thing that a Will cannot do: avoid probate. Let us say it again, a Will does not avoid probate. In fact, a Will actually directs the probate Court as to what your wishes are, such as who should be in charge as Personal Representative, and who your beneficiaries will be. A Will does nothing at all unless it is entered into evidence in the Probate Court someday.
However, if you desire to totally avoid probate altogether, as many people do, there are other actions that will need to be taken above and beyond making a Will.
What to Consider Before Making a Will
Prior to creating a will, it is important to have a complete list of all of your assets, how they are titled (solely in one name or jointly held, etc), and what they are worth. Of course, you would also want to have an idea of who you would want your beneficiaries to be, with respect to all such assets, and whether or not you desire to avoid probate Court. At our firm, we have a simple questionnaire we have our clients fill out in order to gather such information.
Property That May Pose a Problem if Included in Your Will
The purpose of creating a will is to properly orchestrate the distribution of assets after death, and to nominate persons who you would want to be in charge of such distributions. Again, it is important to have a basic understanding of what a Will can do, and what a Will cannot do. There are certain types of assets that, if included in a Will, face certain limitations that you would want to be familiar with, just some of which are detailed below.
Joint Tenancy Property
Joint tenancy property can be tricky.
If a property is owned by multiple owners as “Joint Tenants with Rights of Survivorship” (JTWROS), this means that upon the death of one owner, the other owner continues to own the entire property. This also means that if the first owner dies, and their Will gives the property to another, third person, that this gift will be ineffective and invalid, because the surviving owner would own it, alone. Put another way, the deceased owner’s Will cannot give away property that is still owned by the surviving owner. Regardless as to what the decedent’s will says, the property continues to be owned by the surviving property owner.
If a property is owned by multiple owners as “Tenants in Common”, and one of the owners dies and his or her Will gifts the property, the Will would usually give away approximately one half (½) of the property, and the other one half (½) of the property would continue to be owned by the surviving owner.
Today, most banks automatically set up joint accounts as some version of Joint Tenants with Rights of Survivorship (JTWROS), as described above. Therefore, the same as described above, if one owner dies, the surviving owner now owns the whole account. If the deceased owner tries to give the account away in a Will, the gift will usually not be effective, because surviving owner now owns the whole account, and the deceased owner’s Will cannot give away property that is still owned by the surviving owner.
Funeral Arrangements and Burial Plans
It is not uncommon to include funeral arrangements or preferences in a Will. However, it usually makes much more sense to make all such arrangements in advance, as a completely separate matter, in order to make sure a funeral home or other facility knows exactly what you want, that it is paid for, and is fully arranged. If you have a life insurance policy or burial policy, it is good to make sure such funds go to the correct party, as opposed to getting “stuck” in probate or going to a person that may not be obligated to use the funds for your intended purpose.
Conditions placed upon gifts can also be tricky. Please keep the following in mind:
If you give a gift, free of any restrictions, it is simply a gift – whether that gift occurs now, or upon your death.
However, if you want a gift to occur at a specific time in the future, or only upon certain conditions being first met, this will often require the creation of a “trust”. Put another way, if you give a friend $50 today, free of any restrictions, that is a gift. If you give a third person the $50, and tell them to hold the money and then give it to your friend in two months, you have just created a trust – whether or not you intended to create a trust.
Therefore, if you simply want to say where property goes, it is appropriate to put such provisions in your Will. However, if you put provisions regulating how old a beneficiary must be prior to getting the gift, or when or how a gift is to be made, or set conditions that must be satisfied prior to the gift being made, you are likely placing trust provisions inside your Will. This is permissible, there is nothing against the law about doing this, but it certainly makes the Will more complicated, and will likely result in the Will containing a “Testamentary Trust” (a Trust contained inside a Last Will and Testament). It is very important to understand the nuances related to whether you have written just a Will, or a Will containing a Testamentary Trust, and the difference between the two methods can have many repercussions.
Provisions Related to Pets
For many clients, pets are a very important consideration and may be addressed in one’s Will. However, pets cannot own property, and thus cannot receive a gift in a Will. Nonetheless, what an individual can do is create a trust for the benefit of a pet and ensure that his or her pet(s) will be given to someone who can properly care for them.
There are many different types of pet-related considerations that may come up when doing estate planning. If you are simply leaving a pet to another person, this sort of provision would be very normal and can be included in a Will. Pets are considered personal property, and thus can be gifted to another person. However, if you are leaving a pet to someone with conditions attached, such as leaving that person money that must be used to take care of the pet, you may be unknowingly creating a trust – very similar to the discussion in the previous section entitled “Conditional Gifts”.
It is permissible to do so, but if you are creating a trust inside your Will, you will want to make sure you are intentionally creating a Testamentary Trust, and make sure it is done correctly. Quite frankly, a revocable living trust would often make more sense in certain situations, and you will want to consult with an attorney to make sure that pet related clauses are structured legally and properly.
A Note on Dying Without a Will (“Intestate”)
In the state of Missouri, if someone dies “intestate” (without a Will), state law very clearly identifies the heirs who are entitled to receive the property of the deceased. Conjecture regarding what the deceased actually wanted, or more commonly, what various people say that the deceased wanted, will be of very little consequence. All that will matter is what Missouri State Law says. Therefore, it is imperative for each of us to create a Will, stating who our beneficiaries will be, and who we want to be in charge after we are gone.
Passing away without a will can result in confusion. Loved ones will be in mourning, and will often not have a clear picture of what the assets are, where they are located, or what they are worth. It is best for the decedent to leave direction regarding his or her finances, real estate and personal property, and to at least make a basic Will.
Affordable Legal Services, a Division of Piatchek Law Firm
Affordable Legal Services, a division of The Piatchek Law Firm, LLC, routinely handles estate planning concerns, including wills, trusts, powers of attorney, and health care directives, for a flat rate. We also handle many other concerns such as beneficiary deeds and revocable living trusts.
Attorney Joseph Piatchek is a leading attorney in Missouri who is dedicated to ensuring that your loved ones receive the gifts you intend for them, and that your will provides clear instructions as to what your wishes are in relation to your personal care, property and the management of your finances. If you reside in the state of Missouri, when you are ready to create your will and/or trust, contact The Piatchek Law Firm at 417-895-9501.