Friday, December 19, 2008

Searching For The Last Will

My wife's natural father is very sick. Her relationship with him sadly was distant by his choice. He has been remarried for 14 years or so. The issue is my wife does not feel comfortable asking his spouse if the father has a will. What occurs if he passes away and nothing is said about a will. This is an uncomfortable situation at a very difficult time. Before slipping into an unconscious state the father showed great regret for his choices towards his daughter. Henry, Kentucky.
Your wife's situation is common in cases where the parent remarries. The problem is often compounded by (a) distrust between the new spouse and the children of the prior relationship and (b) a financial disincentive on the part of the new spouse to produce a will if one exists bequeathing part of the estate to others. I think it's vital that your wife ask her father whether or not he has a last will (and, also, whether she is a beneficiary) before he passes away. Perhaps he is too ill to respond at this point.

Most states have a law in their probate code compelling persons in possession of the last will of a decedent to file it with the probate court after the death of the maker of the will. A quick check of the Kentucky probate code found no such statute, however, there is a Kentucky law stating that the court, "on being informed that a person has in his custody the will of a testator, may summon him, and, by proper process, compel him to produce it." Kentucky Stat. §394.160. When the father passes away, if there is no communication from the surviving spouse, check with the clerk's office for the probate court for the county in which the father resided at the time of his death. If a will was presented for probate, that is where it would be filed. If no will is filed, I think you need some sort of information about the existence of a will and who most likely possesses it in order to seek a court order compelling production of the will.

Thursday, December 11, 2008

Last Wills And Divorce

I frequently receive questions regarding the effect of divorce upon a last will. Most states have a provision in their probate code invalidating bequests to former spouses under certain circumstances. Below are samples from three states.
Florida Stat. §732.507. Effect of subsequent marriage, birth, adoption, or dissolution of marriage.--
* * *
(2) Any provision of a will executed by a married person that affects the spouse of that person shall become void upon the divorce of that person or upon the dissolution or annulment of the marriage. After the dissolution, divorce, or annulment, the will shall be administered and construed as if the former spouse had died at the time of the dissolution, divorce, or annulment of the marriage, unless the will or the dissolution or divorce judgment expressly provides otherwise.

California Probate Code § 6122. (a) Unless the will expressly provides otherwise, if after executing a will the testator's marriage is dissolved or annulled, the dissolution or annulment revokes all of the following:
      (1) Any disposition or appointment of property made by the will to the former spouse.
      (2) Any provision of the will conferring a general or special
power of appointment on the former spouse.
      (3) Any provision of the will nominating the former spouse as
executor, trustee, conservator, or guardian.

Texas Probate Code § 69. WILL PROVISIONS MADE BEFORE DISSOLUTION OF MARRIAGE. * * * (b) If, after making a will, the testator's marriage is dissolved, whether by divorce, annulment, or a declaration that the marriage is void, all provisions in the will, including all fiduciary appointments, shall be read as if the former spouse and each relative of the former spouse who is not a relative of the testator failed to survive the testator, unless the will expressly provides otherwise.
All three of these state probate provisions only apply to situation where the testator (i.e., maker of the will) was married at the time the will was made. It is not uncommon for an individual to intentionally make a bequest to a former. So long as the last will containing the bequest to said former spouse was executed AFTER the divorce was completed, these statutes do not invalidate them. What if the the decedent filed for divorce, did not change his last will while the divorce was pending, then died before the divorce became final? For the states of California, Florida, and Texas, to my knowledge the surviving spouse against whom a divorce action was pending at death still recovers any bequest made to her in the decedent's last will.

If you are faced with a set facts in the area of divorce and last wills not discussed above, leave a comment and I'll take a look at it (no guaranty I'll come up with an answer though).

Monday, December 1, 2008

The Probate Estate, What's in and What's out?

Reader Question: Do proceeds of an insurance policy pass under the will? Kevin.

Kevin, I hope you don't mind me taking your limited question and expounding further on the issue. In the vast majority of cases, life insurance proceeds pass to the beneficiary of the life insurance policy named in the policy by the owner of said policy. Usually, but not necessarily, the owner of the policy has insured his or her own life. However, it is possible and not unheard of for the owner of the policy to name his or her probate estate as the beneficiary of the life insurance policy. In this case, and only this case, the proceeds of the life insurance policy would be paid into the probate estate and distributed pursuant to the terms of the decedent's last will. Thus, the answer to your question lies in an examination of the policy for the identity of the named beneficiary.

What other types of assets pass outside of probate? Bank, brokerage and other financial accounts including 401(k) and IRA accounts pass outside of probate if they have a beneficiary named on form filed with the financial institution (for states with laws allowing beneficiary designation on financial accounts). See Uniform TOD Security Registration Act. Real estate that is jointly owned with right of survivorship also passes at death outside of probate to the surviving joint tenant. Several US states also allow TOD transfer of items of personal property other than securities.

This sometimes comes as shock to beneficiaries of the estate of a deceased individual. Let's examine a hypothetical to get a sense of the impact that TOD designation and joint ownership with right of survivorship can have on an estate. George is 57 years of age, married to his 2nd wife. They no children together but George has three children from a previous marriage. In his will George names his three children as the sole beneficiaries of his estate. His major assets are as follows: home jointly owned with wife (equity $150k), 401(k)--$100k, $20k in savings account, and motor vehicles worth $12k.

George dies and his will is filed in probate. Real property owned jointly by a husband and wife is assumed by the law to be held with a right of survivorship. Thus, the home passes to George's wife outside of probate. Further, George named his wife as beneficiary of his 401(k) plan. In total, only $40k in assets were listed in the inventory of George's estate. The burial cost $5k. Debts existed of $3k. The probate attorneys fees and costs were $6k. Further, surviving spouse was entitled to a forced share under state law of not less than $25k. That leaves $1000 to be split three ways between George's children. The example of Estate of George is not an uncommon one, unfortunately.

Friday, November 14, 2008

Portfolio Shrunk, Now Review Your Last Will

OK, take a deep breadth. We've all taken financial hits. The DJIA closed at 12,514 on January 12, 2007 and touched an intraday low of 7982 on November 13, 2008, a loss of 36% in less than two years. In these troubled times, you have many other issues to concern yourself with but another to put on the "to do" list is review your last will. Why? Falling net worth results in specific bequests (both charitable and otherwise) eating up an increased percentage of your estate. The assets of a probate estate are paid out in a specific order: (a) administrative expenses of the estate such as attorney fees, (b) debts of the estate such as taxes, (c) specific bequests, (d) the residuary of the estate. This means a loss in value comes out of the residuary of the estate first. Let's break down an example. In 2007 when he executed his last will, Joe had a net worth of $1.5 million. Let's assume Joe's 2007 last will has specific bequests as follows:
  • $50,000 to each of two sons
  • 5 nieces and nephews, $10,000 each,
  • Boys and Girls Club $50,000,
  • remainder to wife.
If Joe dies with the same net worth as in 2007 (i.e., $1.5 million), the distributions from his estate might look like this:
  • $10k for attorney fees and probate court costs,
  • $100k to sons,
  • $50k to nieces and nephews,
  • $50k to Boys and Girls Club, and
  • $1.29 million to wife.
Wife comes out fine (depending on your perspective) with $1.29 million. But checkout the effect of a 30% drop in Joe's net worth to $1.05 million due to taking a hit in the stock market.
  • $10k for attorney fees and probate court costs,
  • $100k to sons,
  • $50k to nieces and nephews,
  • $50k to Boys and Girls Club, and
  • $840k to wife.
$840,000 sounds like a comfortable amount of money on the face of it but consider this might include the equity of the primary home. For argument's sake, let's say Joe's home has $400k in equity. That leaves $440k in cash for Mrs. Joe. Not in dire straights but not comfortable either. Mrs. Joe might be forced to sell the home if extraordinary expenses pop up like medical bills in the family. With this information in mind, Joe may want to reduce some or all of his specific bequests to push more assets down into the residuary of his estate for the benefit of his wife.

The® Last Will and Testament Form is a fast and economical solutions for those wishing to draft a new will ($13.99, free trial).

Wednesday, October 22, 2008

Do I need a new will when I move?

This is a common question when moving from one state to another. Two points: (a) the state probate laws of the various states (Louisiana excepted) are very similar and (b) most states have an express provision accepting for probate wills created in accordance with the laws of other states. Here is a sample of state probate laws that accept wills created in other states.If I did not list your state and you wish for me to give it a look, please just leave a comment. International wills are another issue. In order for a last will executed in another country to admitted into probate in the United States, your state must have passed a version of the Uniform International Wills Act (part 10 of the Uniform Probate Code) and the international will must meet the requirements of that act. Note in particular the requirement for two witnesses.

The® Last Will and Testament Form is a fast and economical solutions for those wishing to create a simple will ($13.99, free trial).

Monday, October 13, 2008

What Happens When A Devisee Predeceases The Testator?

A common question from persons creating their own last will is what happens if one of the beneficiaries named in my last will predeceases me? The most straight forward way to address this situation is to name contingent beneficiaries who take whenever a devise predeceases you. However, most basic last wills do not name contingent beneficiaries. In the case where a devise predeceases the testator, what happens is a matter of state law. The probate codes of many states have specific statutes addressing the situation called antilapse statutes.

Florida Probate Code §732.603 Antilapse; deceased devisee; class gifts is one such statute (often referred to as "antilapse" statutes). It provides two alternate results. Under Section 732.603(a), if the devisee who died is a grandparent or lineal descendant of a grandparent of the testator, then "the descendants of the devisee * * * take per stirpes in place of the deceased devisee or beneficiary." Let's look at an example to see how that works. Larry leaves his first cousin Sam $50,000. Sam has three children. Sam dies in June of 2008 and Larry in October, 2008. What happens to the $50k? As Larry and Sam are lineal descendants of the the same grandparent, under Section 732.603(a), the $50k shall be split evenly between Sam's three children. What if Sam is Larry's unrelated hunting buddy and instead of a close cousin? Under Section 732.603(b), the devise to Sam then lapses and the $50k specific bequest to Sam goes back into the estate to be distributed with the residuary of the estate as set forth in the last will.

Here is a list of links to antilapse statutes from selected other states:

Saturday, October 11, 2008

Devise By Written List

It's an annual routine to revise my mother's will around Christmas time. What's her greatest concern? Who gets her stuff--jewelry, furniture, personal mementos, etc. It's a long list of specific directions and her wishes change continually. Do I have to draw up a new last will with witnesses and notary each year just so mom can change which granddaughter gets the duck painting hanging in the basement? Luckily, 'no' as we are residents of Missouri.

Section 2‑513 of the Uniform Probate Code allows the maker of a last will to device certain types of tangible personal property (such as clothing, furniture and other personal effects but NOT money) by separate written list not prepared with the same formalities as a standard last will. The exact language of Section 2-513 is as follows:
Whether or not the provisions relating to holographic wills apply, a will may refer to a written statement or list to dispose of items of tangible personal property not otherwise specifically disposed of by the will, other than money. To be admissible under this section as evidence of the intended disposition, the writing must be signed by the testator and must describe the items and the devisees with reasonable certainty. The writing may be referred to as one to be in existence at the time of the testator's death; it may be prepared before or after the execution of the will; it may be altered by the testator after its preparation; and it may be a writing that has no significance apart from its effect on the dispositions made by the will.
Roughly half the states including Missouri follow Uniform Probate Code Section 2‑513. Here is a survey of all US states indicating which allow for devise by separate written list. And here is a sample written list and another sample list.

These lists can be draw up before or after the last will. No witness is required; however, the testator must sign and date it. Further, the list can be amended simply by drawing up a new list and, again, having the testator sign and date it. I gave my mother an electronic copy of her device of personal property by written list so that she can alter it on her own whenever she pleases!

Friday, October 10, 2008

Holographic Wills

A holographic will is one in the testator's own handwriting that does not comply with the normal statutory requirements for a will (such as having two witnesses). Here is California's provision for holographic wills:
A will that does not comply with Section 6110 is valid as a holographic will, whether or not witnessed, if the signature and the material provisions are in the handwriting of the testator.
California Probate Code Section 6111. The majority of states recognize holographic wills; however, a minority including Florida do not. See whether your state accepts holographic wills.

Personally, I just don't see the point to holographic wills in the age of the internet. In bygone days, it was a way for people of modest means to make a simple declaration of intention for disposition of their assets on death. But purchasing a will online for less than $20, to my mind, is a much better solution for a simple will than attempting to write out in one's own handwriting a valid and comprehensible document. Printed forms, especially interactive online forms, stand a better chance of correctly expressing the desire of the testator than a document completely in the individual's own handwriting. Why? Without the aid of a computer program and template language, the testator attempting to draft his or her own will might encounter difficulty plainly organizing beneficiaries designations.

In these difficult financial times, one can only expect more individuals to be seeking alternatives to expending money to pay lawyers. My suggestion is to look for a legal forms company that has been in business for several years. Check the BBB for complaints. Also, look for samples of the product online before purchase.

Thursday, October 9, 2008

Contesting A Last Will

I am often asked by family members about the grounds for contesting a last will. This is especially so for offspring of the decedent who expected to be, but were not, beneficiaries under the will presented for probate. The grounds for contesting a will are limited and, in most cases, expensive to pursue. So get out your checkbook before picking up the phone to call your lawyer.

The easy case is one where there are errors in the required formalities of execution such as the failure to have to two witnesses to the execution of the last will. But those are unusual cases. The more typical grounds for contesting a will are either undue influence or lack of required mental capacity. "Courts require substantial evidence to upset a testator's written will. [Factors of undue influence listed by courts are as follows]: (1) unnatural disposition, (2) opportunity to exert the undue influence, (3) susceptibili­ty, and (4) activity of beneficiaries in procuring the will." Link. "Unnatural disposition" is a case where an individual who is not a relative of the deceased becomes a substantial beneficiary. Susceptibility involves cases where the decedent was more easily influenced at the time the will was executed due to age or health. Activities supporting a claim of undue influence can be such things as the beneficiary selecting the attorney to draw up the new will and / or physically taking the decedent to the attorney's office to execute the new will. No one factor controls undue influence cases. The courts look at the totality of the circumstances in making the determination.

Another common ground for contesting a last will is the decedent lacked testamentary capacity at the time the will was executed. All adults are presumed to possess testamentary capacity so the burden is on the party challenging the will. "To have testamentary capacity, the author of the will must understand the nature of making a will, have a general idea of what he/she possesses, and know who are members of the immediate family or other natural objects of his/her bounty." Link. As determining mental capacity is a medical issue, this is the type of case is susceptible to expert testimony. See example of an psychiatrist specializing in these cases. See also attorney article on generally on challenging last wills.

Can last wills be successfully challenged? Yes but it is a very difficult case to make.

Thursday, September 25, 2008

Last Wills for Blended Families

Today, the Brady Bunch family is more common than Ward and June Cleaver of Leave It To Beaver. Couples come together with children from prior relationships and may, or may, not have additional children together. This creates planning issues not present for the old-style nuclear family. Top of the list: making your spouse your primary beneficiary yet providing for children you may have from a prior relationship. The concern here is that, as the surviving spouse is not the biologic parent of all children the couple are raising, not all children will be treated equally by the surviving spouse in his or her will.

The easiest way to discuss the problem is through an example. Tom and Betty married in 1999. Tom has a son Tom, Jr. from a prior relationship and Betty already had a daughter Betsy when she married Tom. Together, Tom and Betty are the parents of Prince, a son born in 2002. Tom and Betty each have 401(k) and brokerage accounts. They also own a house together and have very little else in the way of other assets. First point, Tom and Betty should check the beneficiary designations on their 401(k) and brokerage accounts to make sure a prior spouse is no longer named as beneficiary. Second, how does Tom provide for Tom, Jr. or Betty for little Betsy while still making their current spouse the primary beneficiary? In my mind, the first issue is the size of the pie. If the couple owns limited assets with modest current earnings they are just getting by on (the majority of Americans are in this boat), then there may not be much to be done for junior in one's last will. If there is some cushion, the easiest route is purchasing a modest life insurance policy naming junior from the prior relationship as beneficiary while making the new spouse sole heir under your will. The proceeds of the life insurance policy pass outside of probate to junior while the new spouse is the sole beneficiary of all other assets.

Rather than a couple of average means, let's assume Tom and Betty have some assets / savings set aside. In these circumstances, a revocable trust is the preferred estate planning vehicle. Why? It is more expense on the front end in attorney fees for estate planning but a revocable trust (sometimes called a living will) offers more flexibility and control over distribution of the assets after the death of the first and/or second spouse.

The following are links to additional articles on the subject:

Tuesday, July 29, 2008

UTMA--Alternative to Testamentary Trust

Those with minor children rightfully concern themselves with the many "what if's" should both of us die. The easy part is, in my mind, is executing a will nominating guardians for your children should both parents die. It may take the parents several hours of kibitzing in the kitchen to agree on the guardian but the mechanics of nominating a guardian are rather straightforward (a simple paragraph slipped into the last will of both parents). The more difficult planning issue concerns the financial welfare of the children should both parents die.

The traditional planning tool creation of a testamentary trust designed to hold and distribute assets as needed while the children or minor, and even till much later in life should you so desire. Let's say each child in expected to inherit several hundred thousand dollars for their parents' estates if both were to die. One advantage of a testamentary trust is that it can control distribution of the assets to the children for as long as the parents desire (limited by the rule against perpetuities in some jurisdictions). Coupled with such features as a spendthrift clause, the testamentary trust does give some added protection against the squandering of the children squandering their inheritance upon reaching majority. The downside of creating the trust is not all that great. You do face added attorneys fees in drafting the trust. Also, the trustee will need to open a special trust account with a financial institution to hold the funds and to file annual income tax returns. In my mind, these are minor when weighed against the benefits.

Still, some people prefer not to bother with trusts. They have faith in their chosen guardian (often a sibling) to use the funds wisely for the benefit of their children. If the expected inheritance is modest, that may be another reason for wishing to do minimal planning in this area. Is there a quick and easy alternative to the testamentary trust? Yes, designation of custodian in your will under the Uniform Transfer to Minors Act. Here are links to the UTMA for several states:How does one designate a custodian for the inheritance to be received by minor children? "[B]y naming the custodian followed in substance by the words: 'as custodian for [name of minor] under the Pennsylvania Uniform Transfers to Minors Act.'" Penn. Stats. Ch. 53, Section 5302(a). Under this arrangement, a custodial account will be set up by the executor of your estate in the name of the custodian designed in your will for each of your children. The downside is that any funds remaining in the account when the child reaches the statutory age are transferred free and clear to the child. See chart at bottom of this page.

Saturday, July 26, 2008

Intestate Succession

What happens when an individual dies without a will? In such cases, the individual is said to have died "intestate" and the decedent's assets are distributed pursuant to the laws of intestate succession for the applicable state. The best source I have found summarizing the intestate succession laws for each state is CCH (just click on the state of interest from chart at bottom of the page).

Let's assume you check the intestate succession laws for your state of residence discovering the distribute rules to be as you wish. For example, you are a single individual in Missouri with no children. The intestate laws for Missouri distribute a decedent's assets in such cases equally between the parents and siblings. Further assume this distribution is how you would have stated it in a last will if you created one so why bother executing a will? Several reason. First, naming an executor in your will makes the process that much easier for this individual to get named as executor (or personal representative, as the case may be) by the court. Secondly, your will can waive the requirement of the executor posting bond and authorized informal administration in many states. This makes the probate process cheaper and faster. If you have children, your last will is the place where you designate a guardian for your children should both parents die while they are minors.

FWIW, here is a web page giving its taken on why you should have a will.

Monday, July 21, 2008

Disinheriting A Child

You are a parent with several children and wish to disinherit one of the children. How exactly is this handled in the drafting of the last will? The bequests to family members generally fall into two categories: (a) specific bequests (i.e., "I leave my 1969 red Corvette to my brother John") and (b) residuary bequests (i.e., "I leave the rest, residue, and remainder of my estate to my children in equal shares, per stirpes"). Instead of naming, as a class, "my children" for any bequest in the will, you would identify by name each child who is a beneficiary and omit the name of the child you wish to disinherit. Finally, to show that the omission of this child from your will was intentional, it is customary to add a line similar to the following to your last will:
I acknowledge that I have a son named Brian who is not provided for in this will. It is my specific intention to not provide for Brian under the terms of my will. See A Practical Guide to Estate Planning and Administration By Michael Gau (2004) p. 37
If your last will document has a "Miscellaneous" section, you can put the above language there or, as an alternative, in the same section where the other children are named as beneficiaries. Are there provisions in the law allowing a child to petition the probate court to be added back as a beneficiary of the estate despite the will language? Absent a claim of mental incapacity on the part of the testator at the time the will was executed, the only provision of the Uniform Probate Code that comes to mind is Section 2‑302. Omitted Children. However, Section 2-302 only applies to a situation where "a testator fails to provide in his [or her] will for any of his [or her] children born or adopted after the execution of the will ... ." The intentional omission of a child is, by definition, different than a pretermitted heir. Thus, Section 2-302 would not help a child intentionally disinherited.

Saturday, July 19, 2008

Transfer On Death and Last Wills

On another web site, I answer user questions on estate planning and business law topics. Not infrequently, I receive questions displaying confusion with the interaction of transfer on death designations and beneficiary designations in a last will. Let's try and break it down.

What is a transfer on death designation?
A Transfer on Death (TOD) designation transfers ownership of designated property to named beneficiaries upon your death without the necessity of probate the designated property. There are two uniform laws which authorize transfer on death designations: (a) Uniform TOD Security Registration Act and (b) Uniform Nonprobate Transfers On Death Act. Of the two, the Uniform TOD Security Registration Act is more popular having been adopted by 48 states and the District of Columbia. As the name implies, this act only allows TOD designation for securities defined as "a share, participation, or other interest in property, in a business, or in an obligation of an enterprise or other issuer, and includes a certificated security, an uncertificated security, and a security account." The Uniform Nonprobate Transfers on Death Act enacted in 1989 has become part of the Uniform Probate Code (see Article VI). Section Section 6‑101 of the Uniform Probate Code significantly expands the categories of property that can be subject to a nonprobate transfer:
A provision for a nonprobate transfer on death in an insurance policy, contract of employment, bond, mortgage, promissory note, certificated or uncertificated security, account agreement, custodial agreement, deposit agreement, compensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, marital property agreement, or other written instrument of a similar nature is nontestamentary.
How are nonprobate transfers different from naming a beneficary in a will?

The obvious difference is that the property subject to a TOD transfer becomes the property of the beneficiary immediately upon the death of the transferor. No probate, no court order is necessary. Another major difference stemming from the first point is that special probate rules do not apply to TOD transfers. For instance, if you name your spouse as the TOD beneficiary, divorce her, then die, the TOD designation is still effective and she will take the property. The probate codes of all states (to my knowledge) invalidate bequests by will to a former spouse where the will was created pre-divorce. Another probate concept is forced shares for minor children and spouses. TOD property is not eligible for apportionment to children and spouses of the deceased although it is often included in the calculation of the augmented estate for purposes of determining the minor child or spouse's eligible elective share of an estate.

Use of TOD in blended family situations

A common situation in our society today is blended families: i.e., one where the husband and wife have children from prior relationships. In such cases, each spouse often desires to have a separate specific bequest made for his or her children that were not by the current spouse. Naming the child as beneficiary of a life insurance policy or TOD designation are two options for providing for the children without making them beneficiaries under the will. I particularly prefer this option when the children from the prior relationship do not get along with the new spouse who is apt to be named the executor of the estate. TOD takes away the potential for disputes with the step parent over the estate as they will not be beneficiaries of the estate.

Sunday, July 6, 2008

Self-Proving Wills

What is a self-proving will? It is one "simultaneously executed, attested, and made self‑proved, by acknowledgment thereof by the testator and affidavits of the witnesses, each made before an officer authorized to administer oaths under the laws of the state in which execution occurs and evidenced by the officer's certificate, under official seal." Uniform Probate Code § 2‑504(a). Essentially, a last will is made self-proving by execution by the maker (together with the witnesses) in front of a notary who acknowledges the document with his or her seal.

How is a self-proving will different than a normal last will? "A self‑proved will may be admitted to probate * * * without the testimony of any subscribing witness, but otherwise it is treated no differently from a will not self proved." See Comments to §2-504 of the Uniform Probate Code. We are a mobile society. What a self-proving will does is eliminate the need to tract down the witnesses and get affidavits in order to probate the will. If the witnesses predeceased the testator (testatrix), more headaches. The bottom line behind taking the extra step involved with a will self-proving is to make the probate process as ease as possible for your family at death.

What happens if a will is not made self-proving? As an example, below is the Missouri Probate Code section setting forth the rules for admitting a last will to probate that has not been made self-proving:
§ 473.053. Testimony of subscribing witnesses, other evidence.
  1. At least two of the subscribing witnesses to a written will shall be examined if they are alive and competent to testify and otherwise available. Before any will is probated each of at least two witnesses thereto shall testify to facts showing that the will was executed in accordance with section 474.320, RSMo. This section does not alter the rules of evidence as to the establishment of a will by probate in solemn form or affect the probate of a self-proved will.
  2. If either or both of the subscribing witnesses to the will are dead, physically or mentally incapable of testifying, or their whereabouts unknown, then due execution of the will by testator and its attestation by subscribing witnesses shall be proved by the available subscribing witness, if any, and proof of the handwriting of any dead or mentally incapacitated subscribing witness or subscribing witness whose whereabouts is unknown, or by such other competent evidence as is available.
The real danger is if one of the witnesses cannot be found, is dead, or mentally incompetent at the time the will is ready for presentation to the court for probate. Then you are looking at not only time to prepare the necessary evidence for probate of the will but also increased estate administration expenses. The attorney fees meter runs at a rapid rate while the necessary testimony and other evidence is collected.

The® Last Will and Testament Form is a fast and economical solutions for those wishing to create a simple will ($13.99, free trial). It can be used to create self-proving wills (USA only).

Saturday, July 5, 2008

Contingent Beneficiaries

What if one of the beneficiaries of my will predeceases me? Personally, I think this issue is blown out of proportion. Simple answer: if one of your beneficiaries dies then redraft the will to leave the bequest someone else. Yeah, but what if we die together? The probability of this occurring is very low but people still fret over it so the law provides a solution: contingent beneficiaries. This class of beneficiary only takes if the primary beneficiary predeceases the maker of the will (the technical term is testator or testatrix). An example is as follows:
I give and bequeath all the rest, residue and remainder of my estate to Sally Smith, but if she shall not survive me by at least 24 hours, then I give and bequeath the rest, residue and remainder of my estate to the Animal Rescue Foundation.
All competent estate planning attorneys will be able to craft a last will for you naming contingent beneficiaries. Some online last will templates allow for the naming contingent beneficiaries, some do not. If this issue is a concern to you, check before purchase whether this feature is offered.

Personal Effects

In terms of monetary value, the decedent's personal effects are of the least value yet often take up a substantial amount of planning time when creating a last will. What are personal effects? The general definition is personal or intimate belongings of an individual such as clothing, jewelry, mementos, personal papers, awards, photographs, and other similar items. As this definition can be slippery, I prefer to draft a definition of "personal effects" into the last will.

My experience has been that people really put mucho thought into who gets their stuff and quite often change their mind after their will has been drafted and executed. To help with this problem, Section 2‑513 of the Uniform Probate Code (adopted by most states) contains a mechanism for naming beneficiaries for specific items of personal property through a separate written list that is signed and dated. I give clients a copy of the separate list for personal effects in electronic format allowing them to change the list at will as they may so choose. Here is a sample written list for use in the bequest of specific items of personal property (MS Word format).

Elements of A Standard Last Will

So you're not a wealthy human with gobs of earthly possessions tying you down in life. Still, you wish to have a somewhat simple last will in place to make things easier on your family / significant others when the inevitable occurs. What are the elements of a basic last will and testament?
  • Personal Representative / Executor. If probate is necessary, this is the person nominated to administer the estate. In case the first named personal representative is unable or unwilling to serve, it is wise to name at least one successor personal representative. Also, you have the option in most states to recite in the will that your personal representative may serve without posting bond. Waiving the bond requirement reduces the administrative expense of the probate estate.
  • Burial Wishes. Do you have any special wishes regarding your burial and / or funeral? Your last will is the place to make these known. Common requests include such things as to be cremated, the location of your burial, or that there is to be no funeral (only a memorial service). My grandfather requested that one of his old drinking buddies sing "Danny Boy" at his funeral.
  • Charitable Gifts. Name bequests, if any, to charitable, educational or religious institutions.
  • Specific Bequests. These are specific items of your property or stated dollar amounts left to specific heirs.
  • Remainder Beneficiaries. The remainder or residuary of your estate is that which is left over after all the administration expenses and debts of the estate are paid plus all the specific bequests. The remainder beneficiaries are generally named as a group taking equal shares or by stated percentages of the residuary for each remainder beneficiary.
  • If you have children, an essential element of your last will and testament would be to nominate a guardian for your children should both spouses dies while the children are still minors.
These are just the standard operative provisions in a last will. They comes with many more bells and whistles. Here is a sample standard last will.