Wills

What is a will?

A will or testament is a legal document by which a person, the testator, expresses his or her wishes as to how his or her property is to be distributed at death, and names one or more persons, the executor, to manage the estate until its final distribution.

Who should make a will?

Every person who can legally make one.

The Procrastination Problem. In our decades of practice, we have noticed that there is a tendency for those to procrastinate when it comes to their estate planning, or to even put a simple will in place.

Unfortunately, we have witnessed a myriad of problems for those who die without wills.

Delay can  result in unforeseen and significant problems.

 

Do not die without a will. 

You should have a will because:

Without a will, the courts will select guardians for your minor children.

Without a will, it means you have died “intestate.” When this happens, the intestacy laws of the state where you reside will determine how your property is distributed upon your death. This property includes any bank accounts, securities, real estate, and other assets you own at the time of death. So, you will not be able to choose your beneficiaries.  Your beneficiaries will be chosen for you, pursuant to the intestacy laws of the relevant states.

Note:  If you die without a will and leave a spouse and children surviving, the assets that are held in your name at death will be distributed not only to your spouse, but also to your children in accordance with the New York and Connecticut state intestacy laws.

Without a will, your estate will not have an executor of your choice appointed.

Without a will, the court will appoint a “guardian ad litem” to protect the interests of your minor/disabled children during the administration process.  Your estate will be ordered by the court to pay for the services of the guardian ad litem.  This cost can be high.

What’s an estate? 

Answer: All the money and property you die with at death.

What’s an executor?

Answer: An “executor” oversees the administration of your estate and carries out the terms of your will.

Without a will, you lose options for many types of estate tax planning.  The loss of tax savings could be substantial.

Without a will, an “administrator” must be appointed to carry out the administration of your estate.  The state intestacy statutes dictate the priorities of administrator candidates for your estate, and judges, not you, ultimately decide who gets appointed

Unpleasant Note:  There are occasions when a person who is appointed by the court to act as your intestate administrator would have been a stranger to you.

Note:  The court procedure for having an administrator appointed can be expensive and time consuming.

What to think about when putting together a Will.

Choose a competent and trustworthy executor.  The job of executor is a serious undertaking.

Note:  Executors bear a “fiduciary” responsibility.  They can be held accountable and personally liable for failing to meet their fiduciary obligations.

“Collective Wisdom Pointer”:  Many of our clients with children, especially those with younger children, choose to establish trusts in their wills for the benefit of their children.

Why’s that?  Assets left to a child directly “vests” with that child, which means that child now owns those assets upon your death.

Trusts offer more control and flexibility over how the assets are controlled and managed.

Question:  Do we have to set up the trusts when we sign our wills?

Answer:  No.  In a typical scenario, the husband and wife include trust language in their wills for the benefit of their children.  The trusts are not established and do not take effect until the death of the second spouse.

Warning:  Executors can be held personally liable by the IRS for either a decedent’s income or estate tax obligations.  We will consult with you on how best to handle this topic.

Note: Your estate, after any other specified gifts and after the payment of certain taxes and expenses of administration, is referred to as the “residue” of your estate.

Note:  Artists with royalty streams that could continue post-death need to exercise extraordinary care in establishing sensible estate plans.  Competent advisors need to be selected preferably by the artist and positioned to assist immediately after death.

It is readily apparent that many estates of artists should be handled with greater care.

 

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