Before your death, your will is a private document, the contents of which need not be known to anyone other than you and your attorney. Upon your death, however, the will becomes a publicly accessible legal document that is under the jurisdiction of the probate court system. Through the probate court, the state assures that your will is valid, that your assets are protected against loss or theft, that your bills and taxes are paid, and that all your remaining assets go directly to the beneficiaries you have designated in your will. Here are some matters to consider when preparing or reviewing a will.
- The heartbreak of intestacy. If you die without a will, your heirs will have to go through the hassle of settling a so-called "intestate" estate. In the event of intestacy, state law dictates how your assets are distributed, and the outcome can be frightening, particularly if you have children who may end up owning half of your estate.
- Discuss the contents with heirs. Despite the privacy afforded by a will, you should discuss its contents with your intended heirs. Doing so not only gives you the opportunity to explain or clarify certain will provisions to those directly involved, it also improves the chances that your will's provisions will be carried out as indicated, with a minimum of doubts and animosity.
- Wills can always be changed. A common misconception is that a will limits your flexibility, but a will can always be altered to reflect changes in your circumstances or desires. In fact, updating the will to reflect such changes is an important part of ongoing estate planning. Getting married or divorced, starting a family, losing loved ones, and becoming disabled all are changes that, more likely than not, will require revisions in your will. Indeed, in many states, marriage, divorce, or a new baby invalidates any existing will. You can either write a new will that declares any previous wills invalid or append a codicil to an existing will. (Codicils are subject to the same legal stipulations as are wills.) Moving to a new state may invalidate a will drawn up under the laws of your previous state. Earlier wills should be saved for reference. If a current will is declared invalid, the latest dated, legally valid will is considered as your legal will.
- How to treat the children. The vast majority of parents sincerely want to treat each of their children the same when planning how their estates are to be distributed. But very often, the children are not the same when it comes to their need for or ability to handle money. This is obviously a very difficult matter to address, and many parents don't want to address it. But imagine how much harm might be done to, say, a spendthrift child who receives an inheritance and a year later has squandered it. Sometimes, the most unfair thing to do is treat each child the same both with respect to how they receive the money and when they receive it.
- Choosing an executor who is up to the task. When your will is created, you will have to appoint an executor (also referred to as a personal representative) to ensure that the settlement of your estate is properly administered upon your death. Otherwise, the courts will appoint one. An executor ensures that your will is probated and that the wishes stipulated in it are properly carried out. The executor has a lot of responsibilities, all of which need to be settled in accordance with legal and tax requirements. Failure to do so may result in penalties. An executor should have financial knowledge, be a reliable record keeper, and be sensitive to the needs of your beneficiaries. Family members may or may not be up to the task. If you choose a family member to be your executor, you may set him or her up for criticism from other family members. One solution might be to appoint a family member as an executor but mention in your will that you expect the executor to hire necessary professionals (lawyers, accountants, and the like) to assist in settling your estate. If your estate is quite large or complex, you might consider appointing a bank trust department, estate-planning attorney, or other professional to serve as the executor. Assigning a professional to this position removes the burden from your family and lowers the possibility that any conflicts might arise. On the other hand, professionals may be rather impersonal for a family that has suffered a traumatic loss. A solution to this dilemma could be to appoint co-executors (for example, a bank trust department and a family member) and thus get both the financial expertise and the personal touch.
- Things change. Family circumstances shift, as does your financial status. People move to different states. Federal and state tax laws change. Therefore, you must periodically review and revise your will to ensure that its contents conform to current laws and regulations and that it still reflects your wishes. Dying with an out-of-date or invalid will can be almost as bad as dying without a will at all.