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Wills And Probate

Q. Do I need a will?

A. If you don't make a will (if you die intestate), the state will control how your estate is divided. By making a will, you will decide the who, what and when of the distribution of your estate. You can also make provisions that will minimize or eliminate inheritance taxes and decide who will administer your estate by designating an executor or personal representative. Through the will you can also make trust provisions for minor children and set out specific funeral instructions.

Q. What is a codicil?

A. A codicil is an amendment or change in a will that is used to avoid having to redo the entire will. It must be executed with the same formalities as a will. It makes the will speak anew as of the date of the codicil.

Q. How do I cancel or revoke an old will?

A. Generally, a will is revoked by destruction of the will or by the execution of a new will. If a new will is subsequently revoked, it does not revive an old will.

Q. If I don't have much property, can I make a handwritten will?

A. Handwritten wills, called holographic wills are recognized only in half the states. To be valid, it must be signed, dated and written by the testator (the person making the will). It is not recommended that you rely on a holographic will. They should only be used under circumstances where there is no time to prepare a proper will.

Q. What happens if I die without a will?

A. Your estate will be distributed in accordance with your state's intestacy laws. Generally, a portion of the estate will go to a surviving spouse, if any, with the remainder being divided among children. If there is no surviving spouse or child, the estate will be divided among the next closest relatives. If there are no relatives, the property will escheat (go to) the state.

Q. What are the formal requirements for a valid will?

A. A will must be signed and dated in front of witnesses who must also sign in front of each other. Most states require two witnesses; some require three witnesses. A will does not have to be notarized.

Q. What kinds of provisions do wills contain?

A. A will should provide for payment of debts and funeral expenses, indicate who receives property, and the name of the executor (personal representative). Many wills provide for alternate beneficiaries (recipients of bequests under the will) in the event a beneficiary dies before the testator (person who makes the will). Often, trusts are established in a will.

Q. What is a trust?

A. A trust is a way that money or property can be given to a beneficiary over a period of time. A will may establish a trust to receive property under a will. The trust can provide for income to a minor until they reach a defined age and for disposition of the trust income and principal in a variety of ways. See the section on Trusts for a more complete discussion of this topic.

Q. Will my estate or beneficiaries have to pay inheritance taxes?

A. The Federal Government imposes estate taxes only if the estate is valued at more than $650,000 (in 1999). Even if the estate exceeds this amount, any money left to a surviving husband or wife is exempt from tax. Estate taxes are imposed on a sliding scale of between 37% to 58% of a taxable estate.

Q. How can I avoid probate?

A. Money and property given to a beneficiary during one's lifetime is not part of the estate and is not subject to probate. Joint accounts, that is, accounts in two or more names, also pass to the survivor of the account owners outside of probate. An "In trust for" account can be created through your bank; money in the account passes to the beneficiary upon the death of the creator of the trust account without probate. Life insurance policies that name a beneficiary also pass outside of the estate and are not subject to probate.

 

 

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