A will is the most important component of any estate plan. Generally speaking, this document names beneficiaries, names the executor, makes specific bequests, describes how administration of the estate should occur, sets up trusts, and names the guardian for minor children.
Names Beneficiaries. A beneficiary is a person who should receive a share of the decedent’s estate. After the cost of the funeral service, estate administration, taxes, specific bequests, and paying off the estate’s debts, each beneficiary will take a share of the remaining estate. Typical beneficiaries include spouses and/or children, though it is important to name alternate beneficiaries.
Names the Executor. The executor is person charged with administering the estate, which generally includes handling the probate process, paying debts and taxes, and distributing estate assets in accordance to the will. Care should be taken in naming the executor. It is imperative that the executor be much younger than the testator, trustworthy, good with money, knowledgeable about the testator and the testator’s assets, and free of felony conviction. Alternative executor(s) must also be named.
Makes Specific Bequests. A specific bequest is a gift to a specific person of a specific piece of property. This is the usual mechanism for making sure the right person inherits that heirloom furniture or classic car. Specific bequests need not necessarily be made in the will. In fact, in some situations, it is advisable not to make such specific bequests in the will; instead, the preferred method of making specific bequests is the letter to the executor that accompanies the will.
Describes Estate Administration. The will should specify how the testator would like the estate to be administered. For instance, the will should indicate whether the estate should be administered by the executor independent of court supervision and whether bond should be required of the executor. The will should also indicate how the debts and taxes should be paid.
Sets Up Trusts. For estates requiring trusts after death, the will generally creates those trusts. Post-mortem trusts are used for tax planning and/or to provide for younger children. Tax planning trusts are discussed in further detail below. As to trusts for children, a trust is often preferable over an outright gift of cash to children. Although a child cannot actually receive and control an outright gift of cash until age 18, many testators prefer that their children not have control of cash until even after age 18. That is, a trust that lasts until the child reaches age 25 assures that the child will have money for college education instead of that Corvette the child always wanted.
Names the Guardian for Minor Children. The will names the testator’s preference of guardian, and alternates, for minor children in the event the testator and the children’s other parent die before the children reach age 18. There are actually two kinds of guardian to name for minor children: guardian of the person and guardian of the estate (money). A single guardian can—and generally does—fulfill both roles for the minor children.
Isaac Shutt is the Attorney/Owner at Shutt Law Firm PLLC. Visit http://www.shuttlawfirm.com or email firstname.lastname@example.org. You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter. Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC.
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