Archive for the ‘Wills’ Category
Tuesday, October 23rd, 2012
As stated in Part VI of this series, entitled “Beneficiary and Personal Representative,” married couples will often execute wills naming each other as both the personal representative and usually the primary beneficiary of his or her estate. Wills of this nature are generally called reciprocal wills.
The benefit of reciprocal wills is the assurance that your surviving spouse will receive the bulk, if not all, of your estate after your death. This will-based set up can also allow for the creation of a more specific estate plan for the surviving spouse, once she becomes the sole owner of the former marital property.
Reciprocal wills are a relatively basic form of estate planning. Married couples have many other options including the use of trusts to potentially protect assets from probate, creditors, and estate taxes. The combination of trusts and pour-over wills is a powerful estate planning tool for married couples. For more on trusts, please refer to the Trusts Series of this blog. For more on pour-over wills, please refer to Part XI of this Wills Series.
Tags: asset protection, Estate Planning, Wills, Wills series
Posted in Asset Protection, Estates, Wills | Comments Off on Wills Series Part XII: Reciprocal Wills
Tuesday, October 9th, 2012
Estate plans can often contain both wills and trusts. The majority of benefits are derived from the existence of the trust. These can include such things as probate avoidance and potential estate tax avoidance. More information regarding trusts can be found in the Trusts Series of this blog. In order to take full advantage of all the benefits of a trust, as much of the donor’s property and assets as possible must be placed within the trust. Sometimes people die without having re-titled all their eligible property in the name of their trust, resulting in some property being part of the Donor’s probate estate.
In such instances, the pour-over will can be utilized to complete the funding of the inter vivos trust after the death of the donor. Pour-over wills are wills that contain provisions stating that the remainder of the assets and property owned by the testator / donor at the time of his death are not to be distributed to any heirs, but are instead to be “poured over” into the trust that he created while he was still alive.
This type of will allows the donor / testator to control the complete distribution of his assets through the trust he created without having to also worry about the distribution of assets through a will.
It should be noted that any property or assets that are “poured over” by the will into the trust will still need to be probated, therefore it is still important to transfer as much property into the trust during the lifetime of the donor as possible in order to keep his probate estate as small as possible, or eliminate it entirely.
Tags: asset protection, Estate Planning, probate, Wills, Wills series
Posted in Asset Protection, Estates, Wills | Comments Off on Wills Part XI: Pour-over Wills
Tuesday, September 25th, 2012
In Part VIII of this series we covered disinheritance and the ability of a disinherited spouse to elect to receive their statutorily allowed spousal share. The spousal share is a portion of the estate of a decedent that can be taken by a spouse who is either left out of a will or given a nominal devise in the will.
The spousal elective share is not a guarantee however, there are instances in which spouses may agree to waive their reciprocal elective shares. In order to effectively waive a spousal elective share 3 criteria must be met:
1. The agreement must be in writing. Elective share waivers cannot be made by simple oral agreement, there must be a writing so that the agreement is perfectly understood by all parties involved.
2. The agreement must be signed by the party waiving the right to their elective share. This is to help ensure that the spouse making the waiver has read and understands the waiver.
3. There must have been fair financial disclosure. In order to make an informed decision as to what is being waived, a waiving spouse must know the full extent of their partner’s finances before making the decision to waive the right to the elective share.
While waiving the spousal elective share is possible it is difficult to do correctly. Beyond the three requirements, the agreement should be drafted by a competent attorney, it should be clear as to what the spouse is waiving, and the waiving spouse should be informed that they allowed to seek outside council from another attorney if they are having doubts or experiencing confusion regarding the agreement.
Tags: asset protection, Estate Planning, probate, Wills, Wills series
Posted in Estates, Wills | Comments Off on Wills Part X: Waiving the Spousal Elective Share
Tuesday, September 11th, 2012
As mentioned in the last two parts of this weekly series, will contests are an annoying and potentially costly consequence of improper execution or the creation of a pretermitted heir. There are a few ways to help limit the possibility of a will contest, the simplest and most straight-forward being the no-contest clause.
No-contest clauses, also know as in terrorem clauses, can be used to dissuade will contests by establishing penalties for those who would consider making such contests. These penalties can include the complete revocation of any devise made to a beneficiary if they decide to institute a will contest.
Of course, for a no-contest clause to work, you must “bait the trap,” so to speak. For example, if you completely disinherit a child from your will, it may make sense for him to challenge it. If he succeeds in having the will thrown out he may inherit a share of your estate through the laws of intestacy. So if you completely disinherit him, he has nothing to lose by challenging the will. But if you leave him a small amount in your will – you decide based on the circumstances what constitutes small – he actually does have something to lose by challenging the will. He may decide to simply take the amount you have left him and forego challenging the will.
For more information regarding will contests refer to Part VII of this series, entitled “Will Contests.”
Tags: asset protection, Estate Planning, probate, Wills, Wills series
Posted in Estates, Wills | Comments Off on Wills Part IX: The No-Contest Clause
Tuesday, August 28th, 2012
Family relations are not always congenial. Because of this, there will be times that a testator will want to write a person out of his will. The intentional exclusion of a person from a will is called disinheriting. Disinheriting a person in a will excludes them from receiving any portion of the testator’s estate. Disinheritance can often lead to a will contest by the disinherited party. For more information regarding this please refer to Part VII of this series, entitled “Will Challenges.”
Whether intentionally excluded or merely forgotten about, a person who is not named as a beneficiary under a will, but would have received through intestacy, is called a pretermitted heir. In most cases, this pretermitted heir will either be a child or a spouse. Under Massachusetts law, a spouse who is intentionally disinherited in a will may choose to receive the elective share. The elective share is a portion of the estate which is calculated based on the overall size of the testator’s estate. This elective share is calculated and then given to the spouse prior to the distribution of the rest of the estate established by the will.
Tags: asset protection, Estate Planning, probate, Wills, Wills series
Posted in Estates, Wills | Comments Off on Wills Part VIII: Disinheriting and the Pretermitted Heir
Tuesday, August 14th, 2012
Although it is not common, the validity of a will can be challenged on numerous grounds. A successful challenge to a will can invalidate either a section of the will or the entire will itself. The most common grounds for contesting a will are:
Undue influence – the testator was improperly influenced by a close friend or caretaker to make unusually large distributions to that person
Lack of testamentary capacity – the testator did not have the required mental capacity to make a valid will
Insane delusion – the testator was suffering from a belief which he adhered to despite all evidence to the contrary and that belief materially affected a provision in the will
Fraud – the testator was intentionally misinformed about a matter relating to the distribution of his estate and this misinformation caused him to materially alter the way that he directed that distribution
In order to contest a will for any of these reasons a person must have standing. Essentially, standing is the right to take a legal action. In order to have standing to contest a will a person must either be named as a beneficiary in the will, or be eligible to inherit from the estate if the will or a provision of the will is deemed to not be valid. Contests and challenges require legal proceedings and can be long and costly.
Tags: asset protection, Estate Planning, probate, Wills, Wills series
Posted in Wills | Comments Off on Wills Part VII: Will Challenges
Tuesday, July 31st, 2012
There is no law in Massachusetts that prohibits a person from being both a personal representative and a beneficiary under a will. The personal representative is the person responsible for the administration of the will according to the wishes of the testator. A beneficiary is a person named in the will to receive a portion of the testator’s estate. There is no reason that a person cannot be named both the personal representative under a will and a beneficiary as well.
Not only is this allowed, it happens frequently. Married couples will often execute reciprocal wills naming each other the primary, if not only, beneficiary under the will as well as the primary personal representative of the estate.
Tags: asset protection, Estate Planning, probate, Wills, Wills series
Posted in Wills | Comments Off on Wills Part VI: Beneficiary and Personal Representative
Tuesday, July 10th, 2012
There are no laws in Massachusetts that prohibit the naming of more than one primary personal representative. Typically, wills name one primary personal representative and then a successor personal representative if the primary is unable or unwilling to serve.
While it is not prohibited, it is not recommended to name more than one primary personal representative. The probating of a will requires some judgement calls to be made by the personal representative in order to ensure the equitable distribution of the estate according to the wishes of the testator. When there is more than one personal representative a majority of the representatives would have to agree before certain final decisions could be made.
Furthermore, should an even number of personal representatives be named, the chance for a stalemate between the personal representatives is possible. Such a stalemate would need to be resolved by court intervention, a potentially long and costly solution.
Tags: asset protection, Estate Planning, probate, Wills, Wills series
Posted in Wills | Comments Off on Wills Part V: Multiple Personal Representatives
Tuesday, June 26th, 2012
Both marriage and divorce can have major impacts on your life, but you may not realize that they can also affect the distribution of your assets after your death. A change in marital status can have an impact on the status of any will that was executed prior to that change. It is important to be aware of those effects in order to properly plan for them.
As stated in Part III of this series, generally marriage will completely revoke any will executed prior to that marriage. The reasoning is that once a person marries, it is assumed that he or she will want to execute a new will in order to include the spouse in the distribution of the estate. This automatic revocation can be avoided however, if the will is executed in anticipation of marriage and that anticipation is clearly stated in the will itself.
Unlike marriage, divorce does not completely revoke a will that was executed during the marriage. Instead, all mention of the former spouse is purged from the will and it is treated as if he or she predeceased the testator. Despite this automatic purging it is often suggested that the testator have a new will drafted at some point after the divorce in order to reflect changes in assets and intended beneficiaries.
Tags: asset protection, Estate Planning, probate, Wills, Wills series
Posted in Wills | Comments Off on Wills Part IV: Marriage, Divorce, and Wills
Tuesday, June 12th, 2012
A properly executed will is considered valid and binding up to and beyond the death of the testator and remains valid despite any subsequent change in the laws of the jurisdiction in which it was executed. The primary way that a will can be done away with is revocation. Wills can be revoked in a few different ways, both intentionally and unintentionally.
The intentional, physical destruction of a will is the most certain way to revoke it. The testator may shred or burn the will with the intent of making the will no longer valid. So long as the intent is to do away with the will, the destruction of the will is considered a revocation.
Marriage can also revoke a will. This is a complicated topic and will be covered more thoroughly in Part IV of this series, entitled “Marriage, Divorce, and Wills.”
It is also possible for the validity of a will to be challenged for any number of reasons which may effectively revoke a will, even after the death of the testator. These challenges will be covered more thoroughly in Part VII of this series, entitled “Will Challenges.”
Wills can also be revoked by the execution of a new will. It is assumed that the creation of a will is the most current and accurate depiction of the wishes of the testator. As a result of this assumption any wills written previous to the newest will are automatically revoked.
Tags: asset protection, probate, Wills, Wills series
Posted in Wills | Comments Off on Wills Part III: Revocation
