While a Will of 10 words carved into a bumper was deemed valid (really, this happened in Canada), ideally you should use something a little more substantial to distribute your estate upon your death. Of course your Will should be in writing, but equally important is what it says. Here are 5 elements that must be discussed in your Will.
1) Who gets what. Some people are quite content to leave everything to one person and let that person sort out what to do with their inheritance. In this day and age, however, when so many people have so much stuff—including multiple properties, bank accounts, cars, etc., leaving it all to one person can actually be a burden on them, both time and tax-wise. When deciding how to distribute your property, consider that the individual might have to pay inheritance taxes on their inheritance or may not be in a position in their life to take on a large financial obligation such as a property or a car.
2) Who administers the estate (read: name an executor). While it is not mandatory to name an executor, it really should be. This is because the executor is the person who gets the authority to act on behalf of your estate. If taxes need to paid, the executor has the authority to release the funds to do so, or to authorize the sale of property to fulfill the tax debt. Similarly, if the Will calls for the estate to be liquidated and sold with the proceeds divided, the executor is the person who would handle this. You should consider very carefully who you name as executor. It is a significant thing to ask of someone and you want to ensure that the person you choose is both willing and able, as well as trustworthy. Also, have a backup executor in case the first one is unwilling or unable to serve when the time comes.
3) How your legatees may use their inheritance—to a point. It may seem counterintuitive, but there are situations where you can mandate how someone uses the inheritance that you give them in your Will. For example, if you are bequeathing property to a non-profit organization, you can specify that it be used only for certain activities. Similarly, it is possible to direct that the inheritance of some legatees, for example minors, be placed in a trust that they cannot access until they reach a certain age. It is also possible to set up a spendthrift trust for a legatee who has difficulty controlling their spending habits.
4) What property is included. It may sound obvious, but the only property that you can completely divest to a third party is what you own outright. If you own a piece of property with someone else and they are still alive when you die, you can bequeath your portion of the interest in the property but you cannot bequeath the entire property. This is because you do not own the entire property. This usually occurs with married couples where one spouse dies and leaves their interest in the marital estate including the house, cars, financial accounts, etc., to the surviving spouse.
5) The most up-to-date information. A Will is only as good as it is current. You may have several Wills over your lifetime depending upon events that occur, people who die or come into your life, or choices you make. Make sure to update your Will when these major events occur.
A Will is an important document for all individuals who have any amount of property to have and maintain. Contact Carolyn Duncan to learn about the importance of having a Will and to let our team help you complete yours today. If you have a will, let us check to ensure it will still work for you.