Estate Plan Basics: Wills

The Last Will and Testament is a classic estate planning tool

This week in our “What is an estate plan?” series we’ll be looking at wills. In case you missed it, last week we went over powers of attorney. Today’s spotlight is on the document that comes to mind when you think estate planning – the will (Or the Last Will and Testament). 

Before we get started, I do want to make a note on probate – we won’t be going into probate with any depth this week, we’ll save that for a future article. Estate administration is a complex topic that demands a longer series. For today, probate is simply the process for taking care of an estate.

Let’s start out with some definitions. A will is a testamentary document. Testamentary documents take effect once you are no longer here. A testator is a person who writes or has a will written for them. The administrator of your will is also called your executor. Duress is a threat or other pressure forcing you into a specific behavior. Competency simply means that you are in reasonable control of your faculties (Reasoning, memory, etc…). The augmented estate is the total value of an estate, counting both assets in probate and outside of it. A codicil is a modification to a will that does not replace or revoke the will. An allowance is an entitlement provided by Virginia law for specific purposes that meet specific criteria. The elective share is an option that an heir may choose to take in lieu of the will’s provisions based on Virginia law. A holographic will is a hand-written and signed will.

Requirements. Wills do not necessarily require that they be drafted by an attorney, typed on a computer, notarized, or even witnessed. There’s no magic formula for what makes a will a will. Rather, Virginia makes wills accessible and adds other considerations to make them much more reliable.

Wills in Virginia must be made by a testator of sound mind and body, free from duress and undue influence, signed by the testator, and express testamentary intent. Put another way, a will has to be made while you know what you’re doing, who will be impacted, and that no one is forcing you or defrauding you to do something.

A will may be entirely handwritten by a testator. If that handwritten will is signed by the testator, it can be found valid without the need for witnesses. These holographic wills may still be vulnerable to challenge if there is evidence of fraud or undue influence over the testator. The reliability of handwriting analysis and consistency in the document helps lend credibility to the will being done entirely by the testator and evidences testamentary intent. 

Wills that are typed or a mix of typed and handwritten does create a need for witnesses. The witnesses must be competent but don’t need to know the testator. The testator must acknowledge and/or sign the will as a will in front of these witnesses. Since a witness does not need to know what is specifically in the will or even know the testator, the witnesses may rely on the testator’s representations. Witnesses should be identified in order to contact them if the will is challenged later.

Although not required, prudent wills include two additional steps – witnesses affidavits and notaries. Notarized witness affidavits help to authenticate a will without the need to call witnesses or experts. A witness affidavit provides a sworn statement by the witnesses and the notary’s record establishes reliability. Taken together, this creates what is called a “self-proving” will; this means that the will in and of itself proves that the will was properly executed.

Before moving on to will contents, just one note on what evidences sound mind and testamentary intent. A will may still be valid if someone is experiencing mental health problems. Lucidity and clarity are at the heart of such validity challenges. Testamentary intent requires knowledge of your estate generally, not for every spoon and coin in your possession. Wills may account for property that was either forgotten or may come into an estate after a will is drafted.

Contents. The contents of a will should vary along with the size and complexity of your estate and your life. Keep in mind that size and complexity is a weird concept in estate planning. An estate with hardly anything in it but a very fraught family situation can be a million times more complex than the $10 million estate with a strong family unit and almost no animosity.

For more context, as of the date of this writing, the federal lifetime gift and estates tax kicks in at $13.9 million and Virginia does not assess an estates tax. Complex estate plans may be right for some people, but for the mast majority of Americans, simple estates are a more accessible and adequate solution.

Typical will contents should succeed in:

·       Identifying relevant parties such as the testator, heirs, and addresses

·       Accounting for property within the estate

·       Designating testamentary guardians and delegating tasks after the testator passes

·       Disposing of after-acquired or forgotten property

·       Waiving data privacy protections

·       Preventing challenges

Rather than belabor the first point we’ll simply repeat – wills need to identify who you are, where you live, and who is set to receive anything in your will. Account for property in the estate so that the executor can take possession of your estate and administer it properly. Designate any relevant testamentary guardians and any conditions attached to their activities. Testamentary guardians are those who will care for your minor children in your absence. You can also designate additional people for activities such as funeral planning or coordinating business activities. Pour-over provisions in a will provide a way to move property you forgot about or acquired after the fact into anything from a testamentary trust or a distant relative. Waiver of data privacy protection has come in vogue with the push for data privacy resulting in frustrated executors incapable of accessing a testator’s accounts to begin the process of making payments or distributions. Lastly, a well thought out will should contain provisions meant to discouraging challenges which could invalidate the will. There are a variety of ways to accomplish this and a quality estate attorney will be able to provide you with further instruction. Contact one here.

Probate and Defense. There is no set time to probate a will after a testator passes. Generally, aim for (30) days after a passing. The executor will bring the testator’s will to the Circuit Court in the county where the Testator lived. The Circuit Court will appoint a Commissioner of Accounts who will ensure that the will is properly administered. This can include ensuring relevant tax payments are submitted by the executor, requesting an accounting and valuation of the estate’s value, validating that all relevant notices to debtors and heirs have been submitted, and generally ensuring that the probate is moving along. The Commissioner of Accounts will also review any amounts that an executor may claim as compensation for their work. The executor is responsible for safeguarding the estate as a fiduciary. Where the estate is challenged, the executor has the authority to engage an attorney in its defense.

Distribution of the estate has some considerations to be aware of.

Virginia law provides for certain family members to claim against an estate. These come in two forms, elective shares (For spouses) and allowances. Virginia recognizes allowances such as the homestead allowance, family allowance, and exempt property allowance. These are amounts limited by Virginia law that may be pulled from the estate. Elective shares are governed by Virginia law and they intend to prevent a spouse from being disinherited. The value of the elective share is contingent upon whether or not the testator has any children in addition to a surviving spouse.

The elective share enables a spouse to claim a greater portion of the estate than the testator may have intended. This has downstream effects for heirs because some of what may have been earmarked for them may have to be sold to satisfy the elective share.

Other challenges include attacking the integrity of the will. For example, the disinherited child may wish to overturn a will so that they may take something from the estate. When a will is challenged and overturned, Virginia’s intestate laws will control. Assume a testator leaves no spouse and has four children. The testator, after a falling out with one child, provides in their will that the estate should be liquidated and distributed to the three favored children. Child four stands to gain a 25% share of the testator’s estate if they contest the will and win. This is because Virginia intestate law takes a simple even split approach in this scenario.

If your will has blind spots that raise concerns, you can always amend your will.

Modifications. Wills may be freely modified over time – after all, spouses change, family relationships change, and new passion projects or business ventures may come into our lives. When modifying a will, it’s critical that you avoid invalidating a will. Codicils should follow the same best practices as wills in order to avoid issues. Since codicils can revoke entire wills, it’s important to ensure that any codicil meant to modify a will is specific and precise. In Virginia, you may revoke a prior will via codicil, executing another will that, or by physically destroying the will.

Broadly speaking, ensure that any of your testamentary documents are kept in a safe and secure location. Keep any duplicates with a trusted party who can secure your documents and ensure that your executor is aware of any updates and storage spaces for such documents.

Wills are a cornerstone of estate planning They’re incredibly versatile documents that produce a great deal of certainty for testators and heirs alike when they’re executed with best practices. A will’s primary drawback is the probate process, which can be cumbersome and costly, however, probate also represents a consistent process that provides for disposition of an estate in accordance with a court’s supervision.

The best time to get your estate plan in place is now, contact me to begin that journey. Estates aren’t simply about the end of life, it’s about protecting you at all stages of life and providing for those you care for.