Last Will and Testament

What is a last will and testament?

A last will and testament is a legal document that details how a person's assets and property will be distributed after their death. People create a will as part of their estate plan to ensure that their wishes will be followed and that the people closest to them will be taken care of after they are no longer there to do it.

People often create a new will or update their existing will for the following reasons:

• Marriage or divorce (a change in marital status may void an old Will);
• Significant change in amount of money or property owned;
• Moving to another state (not all states recognize out-of-state Wills as valid);
• Death of an Executor, Trustee, Guardian, or significant named beneficiary;
• Birth or adoption of a new child in the family;
• Significant change in tax laws; or
• Desire to add or remove beneficiaries named in a prior Will.

What is the difference between a last will and testament and a living will?

Though they have similar names, these two documents have different purposes. A last will sets out instructions for how an estate will be distributed after the person dies. A living will, also known as an advanced healthcare directive, is a legal document that details the medical directions and healthcare measures that will be taken or avoided when someone is still alive but seriously ill or incapacitated and in a position where they can no longer make or communicate those decisions.

What is the difference between a last will and testament and a codicil to a last will and testament?

These two documents are related, but are used at different points in the estate planning process. A last will and testament contains the entirety of a person's will, detailing all of their wishes about how to handle their estate after they die. Once someone has a last will in place, if they need to make minor changes, for example adding/removing a beneficiary, updating a beneficiary's new legal name, or change in assets, a codicil to a last will and testament would be used. The codicil should exclusively be used for minor changes. If someone wishes to make major changes to their existing will, they should revoke the existing will by creating a new last will from scratch.

Is it mandatory to have a last will and testament?

No, it is not necessary for anyone to have a last will and testament. However, it is highly advisable to create a will because it is a crucial estate document that serves many important purposes. Having a last will in place provides for the person's immediate family and other relatives, gets property to beneficiaries quickly, minimizes the expenses associated with the probate process, reduces taxes on the estate, and makes sure everything related to distribution of the estate goes smoothly in an otherwise incredibly stressful time.

If a person dies intestate, or without a will in place, their property must still be distributed. By not leaving a valid will, it is left to state law to write the person's will for them. The state will make certain assumptions about where a person would like their money and property to go -- assumptions with which a person might not agree.

What is a Testator/Testatrix?

The testator (or testatrix if it is a woman) is the person who is creating the last will for themselves.

What is an estate?

An estate is the sum of all the assets and property owned by a person at the time of their death. An estate can include everything owned by the testator, including real estate, personal property, bank accounts, business interests, cryptocurrency, and intellectual property.

What is the residue of an estate?

The residue of an estate is everything left in an estate after specific gifts are made. For example, if an estate was made up of a house, furnishings, two cars, and a bank account with $25,000, and it was specified that the house and its furnishings would go to a favorite nephew, the residue of the estate would be the two cars, the bank account, and anything else that was not specifically given away.

What is a beneficiary?

A beneficiary, also known as an heir, is someone who will inherit something from a person's estate. A wide range of individuals and entities can be named as the beneficiary of an estate. For beneficiaries under the age of 18, it is usually necessary to put the assets they inherit into a trust managed by a trustee until the beneficiary reaches the age of legal majority and is able to manage the assets themselves. Although animals cannot be named as beneficiaries, a testator can use their will to make arrangements to provide for their care. Entities, such as charitable organizations, can be named as beneficiaries in a will.

What is a bequest?

A bequest is a gift of money or property from the estate that is given to a beneficiary.

What is an executor?

The executor is a person who is named in the will who will be responsible for carrying out all the person's wishes concerning the legal and financial matters of the estate. They are responsible for making sure that the people named as beneficiaries get the portion of the estate described in the will. The main requirements for an executor are that they are an adult 18 years of age or older and that they have not been convicted of a felony. The executor may also be named as a beneficiary in the will.

What is probate?

Probate is the legal process an estate goes through in court, where the will is validated, and the executor is given the ability to distribute the contents of the estate.

What is a trust?

A trust is a financial arrangement where a third party, known as the trustee, holds assets and manages them on behalf of a beneficiary. A trust is often used to hold assets for a beneficiary who is a minor until they reach adulthood and are able to manage the assets themselves.

What must a last will and testament contain?

A valid last will and testament must contain at least the following mandatory clauses:

• Description of the testator and their family: The testator should specify whether they are married and, if so, the name of their spouse, as well as whether they have any children. Children include both those that were born to the testator as well as those that were legally adopted. All children should be included in this description, even if the testator does not plan to leave them anything in the will.
• Appointment of executor: The testator must appoint an executor who is responsible for carrying out the testator's wishes concerning the legal and financial matters of the estate once they die. The executor must be an adult who is 18 years of age or older and has not been convicted of a felony.
• Named beneficiaries: The testator must specify who will inherit the contents of their estate. The testator may make specific gifts, naming specific people to inherit particular possessions, property, or cash assets. The testator can also name who will inherit the residue, or remainder of the estate, after they make specific gifts. The last will includes backups and contingencies in case people named as beneficiaries can not inherit once the time comes.

Apart from the above sections, which are mandatory, a last will and testament may also contain the following optional clauses:

• Appointment of a guardian: The testator has the option of appointing a guardian to care for their children who are younger than 18 years old. The guardian would have legal custody of the children if they do not have any remaining parents or legal guardians when the testator dies. In this case, if a guardian is not named in the testator's will, a judge will appoint one.
• Creation of a testamentary trust: The testator may use their will to create a testamentary trust for the benefit of their children. A trust is a financial arrangement where a third party, known as the trustee, holds assets and manages them on behalf of a beneficiary. A trust is often used to hold assets for a beneficiary who is a minor until they reach adulthood and are able to manage the assets themselves.
• Funeral arrangements: The testator can specify in their will wishes they have regarding their funeral and the disposition of their remains.
• Pet care directive: The testator can choose to name someone to care for their pets after they pass away. They may also designate money from their estate to go towards paying for the maintenance and care of their pets.
• Forgiveness of debts: In their last will, the testator can opt to forgive any debts that are still owed to them when they die. If they do not forgive debts owed to them, it becomes the executor's responsibility to collect on the debts and include that as part of the estate.
• Disinheritance: The testator may specify by name anyone who they would lie to disinherit. This means that the named person or people would not receive anything under this will. If the testator has any children that they do not want to inherit from their estate, they should name them here.

What is not allowed in a last will and testament?

In a last will and testament, a person may give away any property they own, except for the following exceptions:

• Their spouse's property;
• The proceeds of a life insurance policy, retirement fund, or annuity where a beneficiary is already named; and/or
• Jointly held property where another party has a right of survivorship.

Who can create a last will and testament?

In most states, a person must be at least 18 years old to make a will. In Georgia, the age requirement is 14 years old. In Louisiana, the age requirement is 16 years old. In Alabama, Alaska, and Wyoming, the age requirement is 19 years old. There is no upper limit, as long as the person has the necessary mental capacity. A person under the required age usually must go to court and get a guardian appointed to make a will for them.

In addition to being of age, a person must have the mental capacity and competency to make a will. This means that the person must know that they are executing a will, have a basic understanding of the nature and extent of their property, and be aware of their spouse, children, and other relatives who would ordinarily be expected to share in an estate. A person's competency to make a will is determined by their mental state at the time they signed the will. As long as the will was made during a period of mental lucidity, it is considered valid.

What must be done after the last will and testament is created?

Once the testator has completed their last will and thoroughly reviewed it to make sure that their wishes are accurately reflected, the testator should sign and date the will in front of three witnesses. The witnesses should also sign the will, attesting that the testator was of sound mind and had the capacity to make these decisions when they signed the will. The witnesses should all be 18 years of age or older and not named as a beneficiary in the will.

The testator should also number and initial the bottom of each page of the will. Finally, the will includes a notary page that a legal notary can notarize to add an extra level of precaution.

After the will has been signed and completed, it should be put somewhere for safe keeping, such as in a home safe or in a bank safe deposit box. The testator may also give copies of the will to people with whom they are close and that they trust, such as a spouse, children, or lawyer.

Is it necessary to notarize a last will and testament?

To be considered legally binding, a last will should be signed in front of a notary and notarized by them. This document includes a notary page for this purpose. For more information about the notarization process, please refer to the guide How to Notarize a Document.

What are the costs associated with finalizing a last will and testament?

To finalize a last will, it is usually necessary to pay a fee to have the document notarized. Aside from that fee, the other fees come up when the testator dies and the executor works to carry out the terms of the will. For example, there are often fees associated with filing the will in probate court.

Which laws are applicable to a last will and testament?

The creation and interpretation of last wills are a matter of both state and federal law. Every state has their own statutes and laws that dictate how wills are created, executed, and probated. These laws cover issues such as who can act as an executor or beneficiary, specific language that must be included in the will, and the process of probating a will. State laws also control intestate succession, or what happens to a person's assets if they die without a will.

The federal government, though less involved in estate law than states, does have some overarching federal laws which impact last wills. These laws are primarily related to tax issues. The IRS imposes estate taxes, as well as gift taxes in some instances, when a person's assets are transferred to another person after they die. The exact taxes levied depend on the amount of assets being transferred. The federal law known as the Employee Retirement Income Security Act ("ERISA") controls how retirement accounts are distributed. This may override or take precedence over what a person specifies in their will, depending on the circumstances.

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