Types of Wills
A Will is an important part of an estate plan. By itself, a Will does not avoid probate for an estate valued over $150,000, although it has an important purpose in estate planning. A Stand-alone Will is a document that declares how you wish your property to be distributed after death.
It is also used to name a guardian for minor children. For young parents the decision on who will become guardians for their children in the event that both parents pass away is highly important. Having a Will that specifies your wishes will ensure that the best interests of the children are carried out.
It is important to review your Will and Trust whenever major life changes occur in your family (for instance you marry or divorce, a new child is born or adopted, a beneficiary changes).
Minor changes can be implemented by a codicil but major changes require a new Will be created and prior Wills be revoked.
If you do not have a Will, your estate will be distributed pursuant to California’s Probate Code laws of intestate succession rather than your desired wishes. For example, if you are married all community property goes to your spouse while separate property goes to your spouse only if no child, parent, sibling, or issue of sibling. If there is a child (or children) your spouse will acquire 50% of your separate property (in the case of 1 child) and 1/3 of property if more than one child. If you are single, your assets will be distributed equally to all of your children then to your parents (if no children), then to your siblings (if no children or parents). Should you desire your assets to be distributed in any other manner, you must have a Will. Further, if you do not want your Will to be overseen by a Judge, you must have a Trust.
What must be in a Will to be valid? Any person aged 18 or older with a sound mind may create a Will. The Will must also:
- be signed by the person creating it, and
- be witnessed by at least two persons, and
- must declare that it is the Last Will and Testament (revoking any prior Wills), and
- identify your marital status and all children, and
- state your intent to dispose of property (referring to specific and residue property) according to directions given in the Will, and
- name the beneficiaries who will be recipients of property
An Executor must be identified and state his/her authority to act without full court supervision (under the Independent Administration of Estates Act). In addition to naming an Executor the Will must name a guardian or custodian for minor children. A Will is the important document that names a guardian or custodian for minor children. For young parents the decision on who will become guardians for their children in the event that both parents pass away is highly important. To prevent later Will disputes, the Will should include a No-Contest clause.
A Pour-Over Will is similar to a Stand-alone Will, but is used in conjunction with a Revocable Living Trust. It is used as a safety net by protecting against intestacy in the event any assets have not been transferred into the Trust at the death of the Trustor. Its function is to “pour” any assets left out of the Trust into the Trust so they are ultimately distributed according to the terms of the Trust. It distributes your assets to the Trust upon your death, pursuant to Trust provisions.
Have you already learned about Trusts? If not, check it out here.