WHAT PROPERTY WILL PASS UNDER YOUR WILL
All property which is in your name alone will be disposed of by your Will. For example, a bank account, stock, real estate, your automobile, furniture, household items and similar items in your name will pass under your will. If you own an undivided interest in property as tenant in common with another, your undivided interest will also pass under your Will.
ASSETS WHICH DO NOT PASS UNDER YOUR WILL
_ Property in joint names with rights of survivorship will not be included in your probate estate or be affected by the terms of your Will, it will pass to the other joint owner(s).
_ Life insurance payable to named beneficiaries will pass to the beneficiaries.
_ Pension, retirement or other employee benefits payable to named beneficiaries will pass to the named beneficiaries.
_ U.S. Savings Bonds which are in joint names will pass to the survivor. Those payable on death to a named beneficiary will pass to the named beneficiaries.
_ Property which has been transferred to a trust will pass to those people named as beneficiaries.
(If the named beneficiary in any of the above examples is “your estate” or your “Personal Representative”, then this property will pass under your Will.)
GENERAL DISPOSITION PLANS
For property which will pass under your Will, it is not necessary that you name or describe each item separately. Your assets can be described by groups, categories or in any other way which adequately describes your property. It is also possible to leave all of your property, or certain categories of it, to more than one beneficiary by providing that each beneficiary is to receive a fraction or percentage of all or any category of property.
If you would like a particular beneficiary to receive a specific item of property or a specific amount of money, such a provision should be clearly expressed in your Will. If you wish to leave a specific sum of money to a beneficiary, because of the fact that your estate may increase or decrease in size between the time that you execute your Will and the time of your death, you should consider whether or not the amount of money should be limited by a percentage of your estate. For example: Assume your estate is worth $50,000.00 and you wish to leave a beneficiary $500.00. Five Hundred Dollars is 1% of your estate. If your estate should shrink to $25,000.00 by the time of your death, this bequest of money may be more than you would have intended under the circumstances. If, however, your bequest is made in terms of the lesser of $500.00 or 1% of your estate, then the bequest would shrink proportionately with the total estate.
PERSONAL AND HOUSEHOLD EFFECTS
In dealing with your personal effects, household goods, etc. (which includes furniture, appliances, silverware, china, wearing apparel, automobiles, etc.) you should consider a provision which leaves all of such property to a surviving spouse and alternatively to children, grandchildren, etc. This clause will normally provide that you may leave a handwritten memorandum which specifies who will receive the property within the group that you have named. Such a memorandum is legally binding if made in your handwriting and dated and signed. Such a document can be made and changed at any time without amending your entire Will.
YOUR RESIDENCE
If you own a residence or other parcels of land subject to a mortgage, unless you provide otherwise in your Will, the person to whom you leave your residence or land may be entitled to require your Personal Representative to pay off the mortgage. If this is not what you desire, you may wish to provide that the residence or land is left to a beneficiary subject to the mortgage, and this will mean that the Personal Representative cannot be required to pay off the mortgage. Instead, it will become an obligation of the person receiving the property.
YOUR PERSONAL REPRESENTATIVE
It will be necessary for you to name a Personal Representative (previously called “Executor”) for your Will. The function of a Personal Representative (PR) is to collect your assets, pay your debts and distribute the remainder of your property to the beneficiaries named in your Will. Many people name their surviving spouses and, alternatively, adult children as PRs in their Will. Some people prefer to name their attorney or a bank with a trust department as their PR. It is possible to name one PR and any number of alternates to serve in the event that prior named PRs fail to serve. For example: A surviving spouse can be named as primary PR, the oldest child as first alternate PR, and the second oldest child as second alternate PR. A PR must be 18 years of age or older to serve. However, a minor child can be named in a Will if that child is over 18 when the Will is probated.
It is possible to name two or more persons to serve as Co-Personal Representatives and such Co-PRs will serve concurrently with each other. Alternate PRs can be named for any Co-PR who does not serve. It may be wise (although it is not necessary) to name a bank as the final alternate PR. Banks with trust departments are usually experienced in the handling of such matters.
TESTAMENTARY GUARDIAN AND CONSERVATOR
It is also possible to appoint in your Will a Guardian and/or Conservator for the physical care and custody of your children and the supervision of assets of your children who may be under the age of 18 and who have no surviving parent. We can discuss this very personal matter more fully at your convenience. We often maintain that this is the most important clause in a Will for parents with minor children.
MINOR CHILDREN
If you have minor children, you will want to consider a contingent trust for them if neither parent survives. This will allow a responsible person, that you appoint, to manage the child’s money until he reaches a specified age. We can discuss this in more detail at your convenience.
QUESTIONS
Please do not hesitate to give us a call if you have any questions. Seemingly insignificant or trivial questions have a way of becoming significant if they go unanswered.