What’s in a Will?
In the 2010 movie Inception, Robert Fischer, played by Cillian Murphy, is held captive in his own dream while the leading characters attempt to plant ideas and suggestions in Fischer’s subconscious. The chosen tactic for penetrating Fischer’s mind? A will. In the film’s climatic scene, Fischer is inserted into a dream world where he stands at his father’s deathbed as his father reveals a secret will, dissolving the family’s business empire and asking Fischer to take the money and build something new of his very own.
The revelation of your last will and testament need not be so dramatic but could be equally impactful for your family and heirs. Wills give you a final chance to leave instructions about the disposition of your assets and signposts for following generations about your desires and advice.
Components of a Will
Wills are the initial building block of any comprehensive estate plan. Your will should nominate one or more people to act as the executor of your estate, provide for the payment of funeral and burial expenses, create instructions for the disposition of any property that you own personally at the time of your death, and, if you have minor children, address who is responsible for their caretaking and financial support in your absence.
Executor: The executor of your state (in some states called a “personal representative”) stands in your place after you die and is responsible for distributing your assets to your intended heirs. In most cases, the executor, with the help of an attorney, will file a probate petition with the local court and request letters executed by a judge confirming the executor’s authority to access and distribute your assets. While the probate action is pending, the executor must protect the deceased’s assets, contact all beneficiaries and family, distribute assets, and file the deceased’s final tax returns (including an estate tax return, if applicable).
An executor should be someone you trust wholeheartedly. Spouses, life partners, children, and siblings are the most common executors but people with large or complex estates may consider assigning executor responsibilities to a financial professional or a bank. In any case, you should name at least one executor and one alternate executor. As your nominated executors age or move away, it is important to name new executors who will be in the best position to look out for your assets and last wishes.
Final Expenses: One of your executor’s first duties will likely be to pay your final expenses. Most wills will contain a term giving your executor the authority to pay your final debts, funeral, and burial expenses, as well as any owed income and estate taxes. Although that general term is helpful, you may also want to identify a source of funding for those expenses, ideally a bank account with cash or cash-like deposits. Executors who are left without cash to pay final debts and expenses can end up in a tough situation, forced to sell non-cash assets like stocks, cars, or real property that could otherwise pass to beneficiaries.
Disposition of Property: Your will can make both specific and general bequests of property to your selected heirs. After you have ensured that your estate holds enough liquid assets to cover your final expenses, you should consider your remaining property and decide whether your want to leave any of it to specific people. Maybe you want to leave your family heirlooms to the only niece and nephew who took an interest in their history or leave a brokerage account to a cousin that helped you through hard times. Whatever the motivation, a will can be used to leave specific property to specific people.
After you have decided whether to leave any specific property to selected heirs, your will should also identify the residual beneficiaries of your estate, or in other words, the people who will be entitled to collect the value of the remainder of your property. Most testators name a small group of people, usually a spouse, children, or other close relatives, to receive residual property in specified percentages. If you have more than a few residual beneficiaries, you may consider leaving some or all of your assets in a trust. Assets held in trust can be passed to your heirs without the need for a probate proceeding, which can save tens of thousands of dollars in legal and administrative fees.
Guardianship: If you have minor children, your will can also nominate guardians to look after your children and provide for their financial well-being. For more details on nominating guardians, see: How to Nominate a Guardian for Minor Children.
Proper Execution
Unlike most other legal documents or contracts, wills must be executed according to very specific procedures. A will that does not meet the specific procedural requirements of the decedents home state is invalid.
In California, a will can be properly executed if it meets the following elements:
Execution by Testator: Most obviously, the owner of the will, commonly known as the “testator” must sign the will at the end of the document. Terms of a will written after the testator’s signature are invalid.
Sound Mind: The testator must be “of sound mind” when they execute the will. To be of sound mind, the testator must understand the property they own and how their will directs disposition of that property and understand their relationship to their living descendants. In most cases, this standard is easily met. But in the case of elderly or potentially incompetent testators, an estate planning attorney can take extra steps to guard against future challenges to the will, including videotaping the execution of the will and taking contemporary testimony from friends and family about the testator’s ability to understand the contents of their will.
Witnesses: The testator’s execution of the will must be witnessed and signed by two people who are not beneficiaries of the will. If a will is prepared by an attorney, it is common for office staff at the attorney’s office to provide the appropriate witness signatures. But, it can be helpful for the witnesses to instead be close friends. In the event of a challenge to the will, friends can be more reliable witnesses of the testator’s execution and competence.
Holographic Will: In California, so-called “holographic wills” are exempt from the above rules. A holographic will is valid if all of its material terms and the testator’s signature are written in the testator’s handwriting. Holographic wills are useful in narrow circumstances. A testator might write a holographic will before unexpected, major surgery or in other potential end-of-life events where there is no time to hire an attorney to prepare a complete estate plan.
***
If your last will and testament only exists in your dreams, contact the Law Office of Ravi Patel for a free consultation. Ravi will help you prepare your will, protect your children and heirs, and help you build long-term peace of mind about your property and estate.
