February 2021: Wills
Let's start with the basics. (Refreshing, right?)⠀
•⠀
Q: What is a Will?⠀
A: A Will (aka Last Will and Testament) is a legally enforceable document that specifies how someone wants their property and financial assets distributed after their death.⠀
•⠀
Q: What does "legally enforceable document" mean?⠀
A: When someone makes their Will, at that moment, it is just a piece of paper (or a bunch of pieces of paper) written and signed in a certain way (set by your state's laws). In other words, it's a plan. And this plan has little (often no) measurable power until the maker of the Will dies. After someone's death, it is time for the plan (the Will) to be put into action. The authority to carry out the directions in a Will is authorized and overseen by a court process (aka the legal enforcement).⠀
•⠀
Q: Who carries out the directions in a Will?⠀
A: When someone makes a Will, they generally name an Executor (or Personal Representative). In the court process, the Executor gets authorization (and the necessary documentation) to carry out the directions in a Will.⠀
•⠀
Q: Does an Executor do anything else?⠀
A: Yes. An Executor usually has a lot more to do than just going around to hand out inheritances. I'll share more about the duties of an Executor later.⠀
•⠀
Q: What happens if you don't have a Will?⠀
A: If you die without a Will (or another estate planning document, like a Trust) in place, your state's intestacy laws apply. These laws and determine how & when & to whom your assets are distributed. Stick around, and you'll learn more about intestacy in an upcoming post.⠀
So, what happens if you die without a Will? In a nutshell: the laws of your state take over. ⠀
•⠀
This is called "intestacy" or "intestate succession." It's the legal process that determines what happens to someone's property after they die without a Will. Aka a set of default state laws. ⠀
•⠀
Here are some facts about intestacy:⠀
• The laws apply regardless of any evidence about what the deceased person would have wanted or the best way to use/distribute their property.⠀
• These laws are made (and changed) by elected officials.⠀
• The individual intestacy processes are generally administered and controlled by the local county courthouse.⠀
•⠀
Put another way: dying without a Will is equal to waiving your right to have a say in how your property is handled and distributed after your death. Even if you had some conversations about what you wanted. Even if you went as far as to write some things down.* Even if your loved ones expect to get, use, or even need your property - none of that matters. Your wishes and your loved ones' needs are irrelevant in this process. (*Unless that writing qualifies as a Will, which it probably doesn't.)⠀
•⠀
Keep reading at https://www.ampersand-law.com/blog/faq-intestate
About those online wills... Wondering if an online will can meet your needs? Trying to figure out if it's necessary to hire an attorney? On purchase price alone, online wills are a bargain as compared to estate planning attorney fees. But are you comparing 100% identical products? Nope. There are many reasons why - here are just four:⠀
•
1. An online will is basically a fill-in-the-blank document, albeit perhaps a complex one. When you're filling in those blanks, do you understand the question you're being asked? Do you know how to answer to meet your goals?⠀
•⠀
2. One-size fits…you? Online wills begin with standardized formats for different users. They include presumptions about that type of user wants to happen with their assets. When you're creating an online will, you may not have control over the format assigned to you. And you certainly won't have control over the presumptions included in that format.⠀
•⠀
3. Each state has specific rules about how a will must be signed to be valid. If you don't get it exactly right - the Probate/Estate Court doesn't have to accept your "online will" as valid after you pass away.⠀
•⠀
4. The online company probably isn't responsible if the will you bought from them isn't accurate, complete, or up-to-date with current laws for your state. Most of these companies expressly state they are not liable for these problems.⠀
•⠀
More information on each of these reasons + other details that may matter to you at https://www.ampersand-law.com/blog/onlinewills
It's time to move into the nuts-and-bolts of Wills:
what Wills do & control;
why Wills do not "avoid probate" & how that's not automatically a bad thing;
the decisions needed to make a Will;
what makes a Will legal;
what the probate court process involves; and
the responsibilities of an Executor (aka their job description).
•••••
Up first: What Wills Do & Control:
1. A Will's power only comes into effect at/after your death. Up until then - it's just a legally-enforceable plan ready & waiting.
2. Your Will controls what happens to your PROBATE PROPERTY. It doesn't control what happens to your NON-PROBATE PROPERTY (unless an exception applies but let's not worry about those now). Non-probate property isn't subject to your Will because what happens to it at your death is determined another way. Some of the most common examples of this are beneficiary designations for life insurance policies and retirement accounts. More on Probate vs Non-Probate Property at https://www.ampersand-law.com/blog/property-probate-nonprobate
3. Beyond the stuff you own, your Will can also provide instructions about the care of your minor children (guardians) & how you want any inheritance they receive handled (testamentary trust). And, your Will can specify who should care for your pets.
4. And, your Will names an Executor - the person responsible for making sure your bills/debts get paid, your accounts (of all kinds) get closed, and that all the things you've specified in your Will happen.
Does a Will avoid probate? NOPE! And that's not necessarily a bad thing! Hear me out:⠀
•⠀
Your Will controls what happens to your probate property when you die. (What's probate property? Check the previous post for more info.) And probate property is subject to probate...⠀
•⠀
Lots of people talk about the importance of avoiding probate and how terrible probate is. Why? Two main reasons: probate costs too much money and takes too long. My take: yep, sometimes avoiding probate is the right answer. Other times (lots of times), Wills and probate are actually better choices. If you want a #DeepDive on this topic, contact me. Here's the #TLDR version--⠀
•⠀
✳️✳️✳️ The reasons to avoid probate are valid, to a point:⠀
(1) Probate court costs and other fees vary from state to state and vary within a state depending on the type of estate. And not every probate matters needs attorneys, accountants, etc.⠀
(2) The timeline for the probate process is set by state law. The most important parts are the mandatory waiting period before asset distribution and the deadline to close the matter. But those aren't usually the cause of delays. Delays happen because of things that apply to both estates and trust assets.⠀
•⠀
✳️✳️✳️ The benefits doing having a Will and going through probate tell the rest of the story:⠀
(1) Setting up a Will generally costs (a lot) less than setting up a Revocable Living Trust. ⠀
(2) Once a Will is done, it's done (until you want to amend it). Once a Trust Agreement is written, there's some (or a lot) more work needed to get assets into the Trust.⠀
(3) Probate requires full disclosure of estate assets, debts, and distributions made, keeping everyone informed and on the sage page.*⠀
(4) The probate process sets a final deadline for creditors to make claims against the estate.*⠀
(5) If everyone can't get along and/or can't agree (and this happens more often than people like to admit), the court can deal with it.*⠀
(6) The court ensures that things get done and get done correctly. This provides certainty to your loved ones and reduces the risk/liability for the Executor.*⠀
•⠀
*These are all things that Trusts do not automatically have/do.
Q: What makes a Will legal?
•
A: North Carolina allows for three kinds of Wills, and what makes each legal varies based on the type.
•
The basic requirements for each type are:
-ATTESTED: written, signed, and witnessed
-HOLOGRAPHIC: handwritten and signed/subscribed, found after death in a place of "safekeeping"
-NUNCUPATIVE: spoken aloud during illness/injury that results in death, to at least two witnesses who know and understand what they are being told
For full details (and yes, there are more details), check out North Carolina General Statutes, Chapter 31 at https://www.ncleg.gov/Laws/GeneralStatuteSections/Chapter31
•
If you're working with an estate planning attorney - you'll be getting an Attested Will. But why would you do that when you could DIY one of the others?
•
🆂🅸🅼🅿🅻🅸🅲🅸🆃🆈. Yes, really. I know the other options seem easier. But, the reality is you're trading easier now for harder later. Why?
•
After your death, the first step Court takes in opening your estate is to verify that your Will is valid. Here's what the Court requires to accept each type of Will as valid:
•
HOLOGRAPHIC: Three witnesses must testify that they know the handwriting to be yours. And one witness must testify about where and when the Will was found.
•
NUNCUPATIVE: (1) Proof that advance notice was given to specific people, allowing them enough time to oppose/object to the Will. Sometimes this notice must be published in the newspaper. (2) The Nuncupative Will must be filed with the Court within six months of it being made/spoken. (3) The two witnesses to the Nuncupative Will must testify that it was spoken to them. (4) One witness must testify that it was made/spoken during the last illness/injury that resulted in the maker's death.
•
ATTESTED: Verify that the document was signed with proper witnessing and notarization. Often, this is achieved just by the Court clerk's review of the Will. Beyond that - no witness testimony is needed, no advance notice is required.
•
So, yeah. 🆂🅸🅼🅿🅻🅸🅲🅸🆃🆈.
•
Want to talk more about this & get your estate plan started? Contact me.
5 FAQs about Probate
•
Probate is the legal process of administering an estate - whether through the directions contained in a Will or via the intestate (died without a Will) laws. Here are 5 FAQs about Probate. If you're not satisfied with the #SocialMediaSoundbite brevity of the answers, you'll find much more info at https://www.ampersand-law.com/blog/5-questions-about-probate
•
Question 1: When does the "reading of the Will" happen? It doesn't - at least not like you've seen it on tv and in the movies. Seriously.
•
Question 2: How does Probate start? The court process of Probate typically starts a few weeks (or more) after someone dies. The exact steps vary from state to state.
•
Question 3: How does Probate end? Probate ends when the Executor has completed their tasks, and the Court grants permission to close the matter.
•
Question 4: How much does Probate cost? When people talk about the costs of Probate, most often they are referring to court fees. Court fees usually include a standard filing fee + an additional fee based on the estate assets' total value. In NC, court fees for a standard probate matter are at least $135 (asset value under $3,750), but not more than $6,120 (asset value $1,500,000 or more).
•
Question 5: Why do people want to "avoid Probate"? The three most common reasons are time, money (cost), and privacy—more on all that in the blog. But there are at least three advantages to Probate:
*The timeline keeps the process moving.
*The Court oversight ensures the Executor does their job correctly.
*The Notice to Creditors requirement sets a final deadline/end date for claims against the deceased.
Protecting Your Children with Your Will⠀
•⠀
You can protect your children with your Will by (1) nominating a Guardian for Minor Children and (2) including a Testamentary Trust. ⠀
•⠀
Talking about the nightmare scenario - 'what happens if I die while my children are young?' - is never easy. Often, it's the trickiest and most emotional part of estate planning. And even though most people will outlive this possible outcome, including a nomination for Guardian for Minor Children and a Testamentary Trust are crucial parts of a Will.⠀
•⠀
When you include a nomination for Guardian of Minor Children in your Will, you specify who you want to raise your children into adulthood if you are unable. This nomination only applies if both legal parents cannot care for their children. It's a nomination because the Guardian has to be approved by the court. Why? DM me for more info. And no, there is no state law default in NC about who should be the Guardian. ANYONE can step forward to nominate themselves. However, a parent's nomination gets "substantial weight" in the court process.⠀
•⠀
When you include a Testamentary Trust in your Will, you provide a safety net for your children's inheritance until they reach a specific age. This means if you die + your Will directs asset distribution to your children + they are under the specific age, then the Testamentary Trust is established. The Trustee you name is responsible for protecting the assets and making distributions for allowed uses/purposes. When the children reach the specific age, the trust terminates and the Trustee makes final distributions to your children from the remaining assets.⠀
•⠀
And, the nomination for Guardian of Minor Children and the Testamentary Trust only apply if you die before your children are the relevant ages and the other conditions are met.⠀
•⠀
Since the odds about living until your children are adults are in most peoples' favor, these sections of the Will are moot and ignored if they no longer apply at the time of a person's death.⠀
•⠀
I know thinking about this is hard. But I promise worrying about it without a plan is harder.⠀
•⠀
More information on estate planning for parents with young children here.
Executors - all* the info. This is the #TLDR version. Do yourself (and me and your future Executor) a favor and check out all of the details here https://www.ampersand-law.com/blog/aboutexecutors
•
Who is an Executor? The Executor named in your Will is the person you want to have the authority to carry out the instructions you've provided.
•
What does an Executor do, generally? Being an Executor is mostly an administrative role and often involves lots of paperwork. But that's not all.
•
How long does an Executor's job last? It's possible for an entire estate/probate process to only take a few weeks. However, most estate/probate processes take months, and it's not uncommon for them to take the better part of a year.
•
What does an Executor do, specifically? It really depends on the estate. It's everything from court filings to dealing with insurance forms to filing taxes to cleaning out the garage. And more. There's a whole list of tasks in the blog.
•
Does an Executor get paid? It depends! But I think they *should* get paid (or at least have the option). This is a #HillImWillingToDieOn (death pun!) - get my full explanation here.
•
*Okay, not all of the info. Truthfully, it's more like "a lot of the info." Or, perhaps "a bunch of the info." But neither of them has the same impact as ALL!