What is a Will?
A Will is reflection of you by giving direction on how you would like your affairs handled. Your Will governs where your property goes after your death, how taxes will be paid from your estate, and can make recommendations for raising your children if they are still underage.
Clearly stating your wishes now and in the future.
Some clients come to my office without a Will. Others have had a Will drafted at some point in the past. In either situation, you interests will evolve over time, and so should your Will.
I have reviewed many Wills written before a client comes to my office. These Wills are typically out-of-date with family dynamics and the client’s desires. Also, the previously drafted Wills do not tackle the present Federal and State estate taxes.
It is worse when someone has died with an older Will. At this point, there is not much that can be done to correct any problems. This also creates family hardships, and hard feelings, not to mention an estate tax burden.
In drafting a Will, I work with clients to anticipate family dynamics and other practicalities in how property and minor children should be cared for at the time of death. Also, any tax avoidance measures are discussed to avoid estate taxes, typically by use of a trust or gifting property.
Periodic reviews of your Will are important to keep current with your personal situation, and also to keep current with changes to estate tax laws at the Federal and State level.
Wills do not avoid probate, but do help control the process.
Many people have a misconception that you draft a Will to avoid probate. In fact, drafting your Will does just the opposite. It forces your property into a probate.
There are ways to avoid probate discussed on other pages in this website, especially on the pages that discuss Trusts and Gifts.
Even though property governed by a Will property heads to probate, it is not necessarily a bad thing. A Will gives much greater controls over many issues that arise at the time of death, including:
- Direct transfer of specific personal property.
- Make specific gifts to individuals, or entities such as charities.
- Transfer certain assets into one or more trusts to limit estate taxes and control distributions.
- Exclude, or disinherit, certain individuals or entities from receiving any of your assets.
- Decide who will handle your assets and debts after your death, commonly referred to as a Personal Representative or Executor.
- Expand or limit the powers of those handling your affairs.
- Offer guidance on employing professionals to assist with finances, taxes, and legal issues.
- Direct assets into a trust after your death.
- Provide for future distributions to minor children.
- Declare who you want to care for your minor children.
Consequences of not having a Will.
There are many negatives if you do not have a Will:
- You lose all control over your property at your death.
- Finding blood relatives to inherit your property may be difficult.
- The state of your residence at death will decide who gets your property, and may even keep the property for the state.
- Your property could be awarded to someone you did not want to inherit your property.
- The Court decides who will oversee distributions and taxation of your property at death.
- If you have minor children, there is no guidance as to who should raise your minor children.
One of Minnesota’s most famous residents, Prince Roger Nelson, died without a Will. Many individuals attempted to claim they were related to Mr. Nelson, which increase the costs or probate.
Because there was no planning done through a Will, or a Trust that is described in other pages on this site, Mr. Nelson’s probate will be subject to significant estate taxes. At the time of writing this webpage, a sister and multiple half-siblings were poised to inherit an estate worth a reported $330,000,000.00, with a potential federal estate tax burden of 40%, or $132,000,000.00 and a potential Minnesota estate tax burden of 16%, or $52,800,000.00. Note that with interrelated calculations, the effective rate for federal and Minnesota estate tax combined will be less than 56%, but over 50%.
Tips for Drafting and Handling Wills
A Will is a legally binding document, executed with two witnesses and a notary public, and enforceable by all Courts, even in other states.
The Court will want the original Will provided to them for Probate. Deciding where to keep your complete Will is important. The people handling your estate will need to know where to find the Will after you die.
With every Will you draft, the most recent in time will control. There are documents that can amend provisions of a Will while leaving the rest of the provisions intact, called a Codicil.
You must be careful if there are multiple Wills of Codicils drafted, as this can create conflicts and uncertainty regarding your wishes.
If you store your own Will, you must make sure the Will is safe from damage and misplacement. Lockboxes and safes are not a great idea unless someone still alive has the ability to access the Will you leave inside. Most County Court Administrators will provide a safekeeping service for their resident’s, and will keep your Will under seal until your time of death.
Some firms demand to keep your original Will in their office for safekeeping. This is usually a tactic to force your loved ones to use that firm for your probate. We do not promote this as we do not pressure clients, especially with something as sensitive as your last wishes.