Wednesday, October 28, 2009

All Assets TOD, Do I Need A Will?

Question: I am widowed, have grown children, my house, car, and financial accounts that are all transfer on death. Do I need a will? Cindy, Missouri.
Response: Legal issues are rarely black and white, most wallow in shades in grey. So it is with your question Cindy. If all of your assets have proper TOD designations, then it is unlikely your heirs shall need to open a probate estate after your passing and, thus, the function of a last will greatly decreases. However, what if an asset exists that you forgot to TOD? What if the form used to create a TOD designation on one of your assets is found invalid? Even in cases where no probate estate is created, a last will naming an executor (aka personal representative) is useful. For instance, your last federal income tax return can be signed by the executor named in your last will. Further, any loose ends with creditors (such as credit card companies), expenses of your last illness, arranging the details of burial, and closing accounts with your financial institutions can be facilitated by someone close to you being named executor in your last will. It gives some semblance of authority to this individual to act in small matters without a formal probate estate being opened.

So one must balance the potential help afforded to your heirs as discussed above against the expense of obtaining a last will. Lawyers do not work cheap; however, they do offer you greater assurance that their work is in accordance with the law. No such assurance comes from online last wills; however, they are inexpensive. Only you can decide how to proceed.

Saturday, October 24, 2009

Testator Physically Unable To Sign Will

Question: I am assisting my brother in preparing his wills. He is currently in a rest home. My brother's condition (the result of age and being legally blind) virtually prevents him from signing a Will with a legible signature. I have been told that he can authorize someone else to sign for him, as long as his authorization and the signing is observed by the Will's witnesses. Is that true? Robert, Arizona.
Answer: The first question is whether your brother is mentally competent to execute a last will. That determination must come from your brother's doctors. Assuming he is, the next issue is his physical inability to sign his name to the last will document. The Arizona Probate Code (as in other states) provides a solution to this problem. It reads, in pertinent part, as follows at Section 14-2502:
A. [A] a will shall be:
1. In writing.
2. Signed by the testator or in the testator's name by some other individual in the testator's conscious presence and by the testator's direction.
3. Signed by at least two people, each of whom signed within a reasonable time after that person witnessed either the signing of the will as described in paragraph 2 or the testator's acknowledgment of that signature or acknowledgment of the will.
Emphasis added. Although the statute seems clear on its face that a last will document may be validly executed if someone else signs the document in the "testator's conscious presence", the testator must have knowledge of the entire contents of the last will (if he is unable to read) before orally authorizing its execution by another.

There is one final tangential issue that might come into play. In Arizona, there is a presumption of undue influence which invalidates a last will. Undue influence exists when one who occupies a confidential relationship to a testator is active in procuring the execution of the will AND is one of the principal beneficiaries of the will. Those acting as attorney-in-fact under a power of attorney executed by the testator have been held to occupy a confidential relationship with the testator. See Estate of Shumway, 9 P.3rd 1062 (2000). Proceed with caution if your hold a financial power of attorney AND are to be a beneficiary of your brother's last will.