Last year, I wrote a column entitled “Important to protect your family with will,” emphasizing the problems that can arise. This column is about some issues to think about when you are making a will, and some of the options you have to pass on your property without one.
There are many considerations, so it is important to discuss your goals and options with a knowledgable attorney.
Writing a will is a process that helps you make decisions about what will happen to your assets after your death. It also can be the tool to plan for what happens if you become incapacitated; when you are still alive, but are no longer capable of making decisions about your health or finances.
Your property might include real estate: a house, land, or camp, for example.
Everything else you own is called “personal property.”
This includes bank accounts, insurance policies, investments, antiques, household furnishings, vehicles and the like.
The people you designate to receive your property are the “beneficiaries” of your estate.
You need to think about who you want to inherit specific properties from you, and also have a back-up: who should get the property if the first beneficiary dies before you do?
Many people leave their property to their spouse and then to their children.
This is fine, and your will can also direct whether everything should be divided equally, or whether particular beneficiaries are to receive specific assets, remembering that the law prohibits disinheriting your spouse.
You name a person or institution (like a bank) as your Executor, and they have the responsibility to make sure your property is distributed as you direct in the will.
This might include selling some or all the assets to pay any bills, and dividing the funds among the beneficiaries.
The executor has the fiduciary duty to protect the assets and make decisions in the best interest of the estate.
You want someone who is responsible, and who is physically and mentally capable of handling these duties; age and health can affect this. A reader asked for a column on this topic, having spent the last five years trying to help resolve a relative’s estate. The relative lived and died in another state, and left her property to an underage relative in a foreign country, stating that the money should be used for this young person’s education.
During this process, it became apparent that much of the delay and complications could have been avoided, if other choices had been made before death. For example, the will named an executor and the beneficiary, but no contact information was readily found. Eventually, both were located, but having their contact information with the will would have allowed matters to go through more quickly.
The estate consisted of three financial accounts, no real estate. Because these are held solely in the name of the person who died, they must go through a court proceeding called “probate.” It has taken five years, so far. The beneficiary is in college and could certainly use the funds.
There are different choices that could have been made, each with its own tax aspects.
The beneficiary could have been added as a joint owner on the accounts, the accounts could have
been designated as “transfer on death” (“tod”) or they could have been put in a trust for the beneficiary.
In all of these, the accounts do not even go into the estate. The co-owner or “tod” or trust beneficiary would have received the money directly from the bank or firm holding the accounts, and much more quickly.
It is similar for a beneficiary named on an insurance policy; it does not go through probate.
It is hard to think about this. You need to grapple with the fact that you will die or become incapacitated, having no idea when.
You know you cannot take your assets with you, so you need to think about giving them away after you are gone.
My will was done many years ago, and I know I need to do a new one, but keep pushing it out of mind.
Writing this to you may help me get it done!
Penny Clute was Clinton County district attorney from 1989 through 2001, then Plattsburgh City Court judge until her retirement in January 2012.