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Wills – The Basics

Introduction

What is a will? Why create a will? What are the different types of wills? What if I have a will and want to change it? Are there other legal methods that can do what a will does, but better? These are all good questions, and every legal adult (i.e. 18 years of age or older) should at least have a basic understanding about wills and substitution options for wills.

The truth is that many adults do not understand how wills operate, and even more do not have a will. In fact, some studies show that anywhere from 50% to 70% of all adults do not have a will.

It is very likely that the number one reason why adults don’t have a will is because people hate talking about the subject of death. Face it – death is an awkward subject. But as we will show in the article, if you don’t properly prepare a will or will substitute, the government ends up doing it for you through the laws of intestate succession.

When the government decides where your property and assets go, it is almost inevitably done at greater expense and time than if you had done it yourself. So, the key is to avoid the government’s involvement.

In this article, we’ll discuss the basics about a will, why and how to properly create a will, the different types of wills, and methods that can be used that are often better at protecting your property than with a will, known as "will substitutes."

Next, we’ll very briefly go over the "players" in the will process.

The "Players" in the Will Process

First, you need to know the terminology and people involved in the will process. Here is a very brief overview of who is involved in the will process.

Testator = person who has the will (So, if a person dies with a will, that person is said to have died testate. If a person dies without a will, that person is said to have died intestate.)

Lawyer = person who drafts the will for the testator (Lawyers are not required to make a valid will, but it is generally wise to hire a lawyer.)

Beneficiaries = those who hope to take something from the will (We say "hope" because that is all any beneficiary has until the death of the testator. We’ll show why later in this article.)

Executor = person (or entity) named by the testator to carry out the terms of the will

Probate Court (i.e. "Probate") = the court where the will is "proven" (This means the written terms in the will are shown to be the intent of the testator.)

Next, we’ll explore the common characteristics of a will.

Common Characteristics of a Will

Chances are that you have at least heard that a will is a legal document used when a person dies. This is true, but not the most accurate definition. A will is more clearly defined as a formalized document that provides for the distribution of a person’s assets upon the person’s death. There are different types of wills, but all wills carry some common characteristics.

Common Characteristics of a Will:

First, wills can only be made by a human being of legal age (i.e. 18 years or older). However, some states do allow a minor (i.e. person under 18 years old) to make a valid will if the minor is (i) married or (ii) in the military. But entities like corporations, partnerships, and limited liability companies can never have a will.

Second, wills are ambulatory – that is, wills do not become operative until the person dies. For example, if testator Tom makes a valid will today, that will has no legal effect until Tom actually dies. Therefore, Tom is free to change his will as many times as he wants up until his death. The beneficiaries of Tom’s will (i.e. those who plan to take under his will) have only the hope of receiving anything. In other words, the beneficiaries are entitled to nothing until the testator dies and the will is admitted to probate to prove the contents of the will.

Third, wills have to be admitted to the probate court to prove the contents of the will (often referred to as "probating the will"). The probate judge’s main job is to carry out the intent of the testator. The judge does this by making sure that all the formal requirements have been met, reading what the will says, and then listening to other evidence if necessary. It must be emphasized that a judge will NEVER add words to a will, but may delete portions of the will (or the whole will). However, usually the words of the will are carried out, as long as the words aren’t too ambiguous.

Fourth, wills are public records, as opposed to private documents. This means that anyone can successfully challenge a will if he or she can prove that the intent of the testator was for the challenger to be included in the will or receive more property or assets. (Please read "Challenging a Will" for more details.)

Next, we’ll cover the different types of wills.

Types of Wills

There are basically 3 different types of wills: (1) written formalized wills, (2) holographic wills, and (3) oral wills (also known as non-cupative wills). All states recognize written formalized wills, but not all states recognize holographic and oral wills. Let’s go over each of these in a little more detail.

1. Written Formalized Wills

A written formalized will is a written will, signed by the testator, witnessed by 2 to 3 witnesses, and attested to. These are the vast majority of all wills, and lawyers create these wills for testators.

2. Holographic Wills (not all states recognize these)

A holographic will is a handwritten will; it is not created on a word processor. A holographic will is defined as a (i) dated, (ii) signed, and (iii) handwritten will in the handwriting of the testator with donative intent. The BIG EXCEPTION of holographic wills is that they are not witnessed and attested to. Remember, this means that no witnesses are required for a holographic will. To illustrate, let’s use a hypothetical.

Assume that Tom the testator is stranded on a deserted island and on the brink of starving to death. Tom gathers the strength to carve into a tree the following: "I, Tom, devise all my property to my best friend, Al." Then Tom signs his name with a "T" and dates it "8-18-09" under the words. Later, Tom’s body is found next to the tree. Tom is survived by his wife and three children. If the state in which Tom lives recognizes holographic wills, there is a chance that much or all of Tom’s property would go to Al, instead of his wife and children. Now, this is an extreme example, but if the probate court determines that Tom’s donative intent was written into the side of the tree, those words would operate as a holographic will. As you can see, donative intent is very important.

3. Oral Wills

Only about 5 states recognize oral wills (at the time of this writing), and even for the states that do recognize oral wills, the requirements are very strict. Let’s go over those requirements.

5 Requirements for an Oral Will:

Testator must have been in impending and immediate peril and fear for his or her life
Testator must die from the peril;
Statements of testator must be heard by 2 or more witnesses;
The 2 witnesses must reduce the oral statements into writing within 10 days; and
The writing (by the 2 witnesses) must be introduced to probate court within 6 months of testator’s death

Additional Consideration:

Oral wills only transfer personal property. Real property (e.g. someone’s home) cannot be transferred by an oral will because the Statute of Frauds does not allow it.

Electronic recordings are allowed in the state of Nevada to prove a will. Videotaping has been used by testators to record where the will was signed, witnessed and executed.

Next, we’ll go over the actual documents used in the will process. (Yes, lawyers will almost inevitably use more than one document in the will process – and there is good reason for it.)

Documents Used in the Will Process

There are generally four documents that are used in the will process. These four documents are: (1) the will of last testament, (2) living will, (3) durable power of attorney for legal matters, and (4) durable power of attorney for health matters. Let’s go over the function of these documents.

1. Will (i.e. Conventional will)

This is the document that we’ve been talking about this entire article. It is the written and formalized document used to devise your property and assets upon your death.

2. Living Will

A "living will" has nothing to do with the will we have been talking about in this article. Rather, a "living will" is a legal document that gives instructions to medical personnel in the event of severe injury or terminal illness of the testator.

A living will is used for situations when the testator would be unable to make medical decisions for him or herself. It is called a ""living will" because the testator is still alive when the instructions are carried out (although sometimes only medically alive). In general, the main decision to make with a living will is whether you want all medical treatment to be used to try to keep you alive, or not. Living wills are also revocable (just like traditional wills), which means the testator can change the living will up until the point of becoming incapacitated. However, what is considered to be "incapacitated" varies. This is a document where it would be highly recommended to use the services of a lawyer.

3. Durable Power of Attorney for Legal Matters

A durable power of attorney for legal matters is a document where the testator gives another person the power to make legal decisions for the testator upon becoming incapacitated. There are two main versions in how this document is set up.

The first (and more common) version makes the document effective only upon the court’s determination that the testator is incapacitated. Until the court makes that decision, the testator retains complete control of all of his or her legal matters.

The second version is effective immediately upon the signature of the testator. All legal decisions concerning the testator are immediately granted to the person whom the testator chooses. The court will not get involved or make a determination about the testator’s capacity. This second version should be used with caution, because the person whom the testator appoints may legally be able to sell the testator’s house immediately after the document is signed by the testator.

4. Durable Power of Attorney for Health Matters

A durable power of attorney for health matters is document where the testator allows another individual to make certain health care decisions for the testator. The person selected by the testator to make such health care decisions usually does not gain that power until and if the testator becomes incapacitated. Upon incapacitation of the testator, the person selected by the testator to deal with the testator’s health matters may be able to make such decisions as disconnecting life support, and agreeing to certain medical procedures.

Next, we’ll look at why a will might not be the best way to devise your property.

Will Substitutes – Often Better than a Will

This whole article talks about wills. However, there are many other ways to devise property other than by using a will. In fact, even with people who die intestate (i.e. without a will), much of their property will likely not go to probate. Many people already have will substitutes, and don’t even know it. Here are some examples of will substitutes:

Trusts
Life insurance policies
Pension plans / IRAs
Joint Bank Accounts
Joint Tenancy with Rights of Survivorship
Transfer on Death Deeds

Will substitutes take the place of a will, because they do the same thing that a will does – they devise property. Many will substitutes can also be created by a minor.

Wills and will substitutes are also completely independent of each other. For example, assume you set up a joint bank account with your spouse. You then decide to create a will. At this point, you would not be able to create a will that attempts to devise your interest in the joint bank account to someone other than your spouse. In other words, the joint bank account is independent of your will.

The most influential will substitute is often a trust. A trust can basically do everything a will can do, but without the hassle of going to probate court. Therefore, it is often much better to set up a trust than a will because trusts are not subject to probate. In fact, for many people it is most advisable to set up a revocable living trust instead of a will. Because there are so many options in how to legally devise your property, it is generally best to consult with a lawyer about your options.

Finally, let’s wrap up what we’ve talked about with wills on the next page.

Conclusion

In this article, we explored the fundamental concepts involved with will. We covered a lot of material, including the individuals involved in the will process, common characteristics of a will, different types of wills, documents used in the will process, and examples of will substitutes. If you need to go over this article again to review the terminology, we recommend that you do so.

Congratulations! You now know more about wills and will substitutes than most people. Talking about wills is not usually the subject of choice for most people because it deals with death. However, it is better to think of it as dealing with life – the life you want your loved ones and beneficiaries to have after you are gone. We hope you have at least gained enough insight to take the next step to protect your property and assets, whether through a will or will substitutes.