DO I NEED A WILL
DO I NEED A WILL WHEN I SEPARATE OR DIVORCE?
There are three documents that every person who separates or divorces needs: a durable power of attorney for financial purposes; a health care power of attorney; and a will.
A will directs to whom and how your probate estate is distributed at your death. Without a will, your assets are distributed according to the law of your state. If you die with a will, you are deemed to have died "testate." If you die without a will, you are deemed to have died "intestate." If you have a will, you have the right to choose an Executor or Personal Representative to handle your affairs; if you don’t have a will, the probate or surrogate court will choose this person for your estate – and it may not be the person whom you would have wanted. If you are divorced and have an estate of more than $600,000, you can’t do much tax planning because you do not have a spouse; however, there are planning techniques you can use during your lifetime.
If you have minor children or children with special needs, you need a will. If you have more than $600,000 in assets, you need a will. If your desires of where your assets go on your death differs from the statutory dispositions in your state should you die intestate, you need a will. If you want to avoid possible litigation among family members, you need a will. If you are separated or divorced, you need a will. If you are getting married for the second time, you need a will. If you own a closely held business, you need a will. You need a will if you care who will administer your estate – otherwise, the state court will choose a person to handle your estate for you.
Bottom Line: Unless your plan is included in a will, it will be impossible for anyone to distribute your property as you desire. Unless your plan is included in a will, you should assume that there will be litigation over your estate – especially if you own real estate and other non-divisible assets at your death. And this is most important if you are separated or divorced.
Your "probate estate" is all property that you own along with interests in property that do not pass to others by what is known as "operation of law." Examples of property that will not be included in your probate estate are 1) a bank account you may own with a relative that is jointly held with a right of survivorship; 2) a house you may own with your spouse that is titled jointly with right of survivorship – meaning that if you die, your spouse will receive the total ownership at the instant of your death – and vice versa. In this event, the house would not be part of your probate estate. However, if you are divorced, this contingency is unlikely. If you don’t have a will, then your assets will be distributed according to state law.
REMEMBER THESE IMPORTANT POINTS: (1) Your "taxable" estate may well include assets that are not included in your "probate" estate. This means that probate avoidance does not mean tax avoidance. (2) Your will can not be used to choose the beneficiaries of life insurance, IRA’s, 401k’s, and pensions. This means that you must follow the rules of the insurance company/IRA/pension in choosing beneficiaries. (3) If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin – or lived in any of these states in the past and own property there, then property ownership known as "community property" comes into play. In community property states, each spouse owns an undivided one-half interest in property acquired during the marriage – which must be considered. The other states – called "common law" jurisdictions – base their property ownership system on that of England.
If you separated, but not divorced, you can not cut your spouse out of your will -- unless there is a written waiver or release in your separation agreement or prenuptial agreement. In most states, a surviving spouse – even if estranged -- is granted the right to elect against the will and take a statutory share if the will leaves him or her nothing. Generally, this share is one-third. Some states have an allowance for not only the surviving spouse, but also surviving children. If you try to cut your spouse out of your estate through your will, he or she can renounce the will and, instead, make an election to take the share of your estate provided for by state law. Remember: The share and definition of what is included in your estate varies from state to state, so be sure to check it out.
If you die without a will are still married – even though estranged -- and have children, most state laws require a third to a half of the estate goes to the surviving spouse and the rest to the children, no matter their ages. If the children are minors, in all probability, the probate court will require their share be maintained in a guardian account with reports and accountings made to the probate court until the child reaches 18. If you had left a will, you could have provided for a trust to hold these assets for the children without probate court intervention. Remember that guardianship is a very difficult and inflexible way in which to manage financial affairs. And it is important that at the end of the guardianship, the assets must turned over to the children at age 18 (or 21 in some instances) – a time when most children are not capable of handling large sums of money. If you had created a trust in your will, you could have dictated that the assets not be turned over to the children until they reached 25 or 30 years of age.
If you are married – although estranged -- and die without a will and have no children, your surviving spouse will receive a third to a half of your estate, and the remainder will go to your surviving parents or, if they are deceased, to your siblings.
If you die without a will as a single, divorced parent, generally speaking, state laws provide for your estate to go to your surviving children; however, this could be a problem if any of your children have special needs or disabilities. Remember: If you are separated, not divorced, and die with children, your estranged spouse will be entitled to a share just as if you have been living together – that is, unless your state law provides differently.
If you die without a will as a single person with no children, generally speaking, your parents (if alive) will receive your assets. If both parents are deceased, then your estate will generally go to siblings. If it important to remember that if either or both of your parents are disabled or are in a nursing facility, receipt of assets from your estate could very well disqualify them from some or all of their benefits.
If you have minor children, you should always name a trusted person as guardian and trustee of them and their property. In all cases, both primary and alternate appointments should be made – just in case your primary appointee can not or will not serve. It is important to remember in divorce and separation situations that you can will or transfer custody of children since the court is the final arbiter of the children’s best interests. However, you can choose a person other than your estranged spouse as trustee of funds you leave for your children.
In preparing your will, you should name an executor or personal representative (usually the other spouse, if you are married) along with an alternate if, for some reason, your first choice can not or will not act. After providing for the payment of debts and taxes, the will generally included "specific bequests" of property – such as, "I leave my baby grand piano to my niece, Janice." It is wise to add wording such as "....... if I own this property at my death" so that, if you sell the baby grand and do not change your will, Janice will not be in position to litigate the fact that she is entitled to the value of the baby grand piano.
After making specific bequests, you will dispose of the remainder of your estate. Called the "residue," this provision includes everything that remains after payment of debts and taxes and distribution of specific devises. Generally, if you are married, the residue would go to your spouse if he/she survives you and, if not, to your living children either "in equal shares." Should one of your children die before you, you can provided either that 1) that child’s share lapses and is divided among your living children or 2) that child’s share goes to his or her children – called "per stirpes" in the law. This choice is yours.
What if the recipient of a specific bequest dies before you? You should provide for either a contingent beneficiary or provide that the specific property should go into your residuary estate.
Since it is possible for you and a beneficiary to die simultaneously, you should not only determine and choose the guardian, but also include a "common disaster" clause. Although this can be drafted in a number of different ways, your will should provide something to the effect of the following: "All of the rest and residue of my estate goes to my children in equal shares provided they survive me by at least 15 days. Should any child not survive me, the share that would have gone to that child shall go to my surviving minor children in equal shares and in trust as follows:….." .
Since a will is a formal document that expresses the final wishes of the "testator" about disposition of his/her property, each state has certain requirements for the will to be valid. The maker of the will must have what is known as "testamentary capacity" – meaning that he/she must be of sound mind, understand the objects of his/her affection, know his/her property, and understand where he/she wants the property to go.
Just the recital in the document that "Testator is of sound mind" will not hold up in court. That’s why it is important to find witnesses who can certify that Testator had capacity. In most states, the will must be signed in the presence of two witnesses, and the witnesses must sign in the presence of each other and the Testator. Some states have provisions in their laws that wills can be "self-proving" if a notary public certifies that Testator and witnesses affirm that all of them were within sight of each other when the will was signed, that the Testator is competent when the will was signed, , and that the Testator had asked the witnesses to attest to these facts. If done in this fashion, no witnesses need appear in court to "prove" or verify the document.
Although some states allow handwritten wills where there are no witnesses, the majority of states do not allow these types of wills.
Since no written changes to the original will are allowed, if you wish to amend your will, you may use a "codicil". This separate paper should refer specifically to the original Will, and be signed with the same formality as a Will.
© 1997, Flying Solo. This information is general in nature and is not intended to be construed as legal advice. Because all situations are different, do not make any decisions until you have consulted with the legal professional of your choice.