The simple will is the most common estate planning document, but a lot of people do not understand the details, limitations, and drawbacks. In this post, we will provide an overview so you can go forward with enough knowledge to make more informed decisions.
Everyone is aware of the fact that you can state your wishes with regard to the way you want your assets to be distributed after your passing in a will. You can also name a guardian to care for your dependent children if it ever becomes necessary.
In the will, you can name an executor. This is the person or entity that will act as the estate administrator after you are gone.
The executor cannot act independently after the death of the person that created the will (the testator). It would be admitted to probate, and the court would provide supervision during the estate administration process.
Proving of the Will
One of the duties that must be performed by the court is a proving of the will. The court will examine the will to make sure that it was executed properly.
Under the laws of the state of New York, you must sign your will in front of two witnesses, and they have to sign the will in front of you.
Now that we are living in the electronic age, a provision has been added to account for electronic wills in some states, but New York isn’t one of them.
A will can be valid if it is not notarized, but you can streamline the process if you go to a notary. If the will is not notarized, the court would be required to contact the witnesses, but this is not necessary if the will has been properly notarized.
During probate, the will can be challenged for improper execution and three other grounds. In order for a will to be valid, the testator must be of sound mind, so incompetence is one of these grounds.
Fraud is another potential reason for a will challenge. This would enter the picture if someone contends that the document was signed under false pretenses.
Undue coercion is the other acceptable ground for a will contest. For example, let’s say that a senior citizen is relying on someone for help with their day-to-day needs. The caregiver tells the senior that they will stop providing assistance unless they create a will leaving the caregiver everything. The will would be invalid, because the testator was unduly coerced into signing it.
Debts and Asset Preparation
Creditors must be notified about the passing of the decedent, and they are given a certain amount of time to come forward seeking satisfaction. The executor will open an estate bank account and pay valid final debts, and the assets will be identified and prepared for distribution to the heirs.
Simple Will Alternatives Exist
The probate process is time-consuming and costly, and it is public, so anyone that is interested can access the records to find out what transpired. It serves a purpose, but it creates hassles for the rightful inheritors.
If you state your final wishes in a will, the people that are named in it would receive lump sum inheritances all at once unless you include a testamentary trust. Plus, there would be no asset protection after the inheritances have been distributed.
These circumstances are less than ideal, but you can avoid them if you use a revocable living trust as the focal point of your estate plan. You would act as the trustee while you are living, so you would maintain control of the assets.
In the trust declaration, you would name a successor trustee to administer the trust after you are gone, and your heirs would be the beneficiaries. When the time comes, the trustee would distribute assets to the beneficiaries in accordance with your wishes outside of probate.
Plus, you could include a spendthrift clause, and the trust would become irrevocable after your death. The beneficiaries would have no access to the principal, and this would also apply to their creditors.
You could add another layer of protection by instructing the trustee to distribute limited assets on an incremental basis over an extended period of time.
We Are Here to Help!
Today is the day for action if you have been going through life without an estate plan. You can send us a message to request a consultation appointment at our Manhattan estate planning office, and we can be reached by phone at 212-973-0100. Consultations are available after you have watched our free estate planning webinar.