Chapter 1 The Purpose and Need for a Will

Wills, Trusts, and Estates Administration, 3e Herskowitz 2 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Learning Objectives Understanding why many people don’t have wills Understanding the key characteristics of a will Understanding the need for a will Understanding key terms associated with a will

Wills, Trusts, and Estates Administration, 3e Herskowitz 3 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Why Do Many People Not Have A Will? They don’t want to think about their death They think are they are too young for a will They procrastinate They believe they have nothing to put in a will A 2008 Findlaw.com study found that 58% of Americans do not have a will

Wills, Trusts, and Estates Administration, 3e Herskowitz 4 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. The Key Characteristics Of A Will It is a written declaration of one’s intent It is ambulatory It requires beneficiaries It must be executed according the testator’s jurisdiction It requires a probate to settle the estate

Wills, Trusts, and Estates Administration, 3e Herskowitz 5 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. A Will Is Ambulatory Wills only become effective upon the testator’s death Wills can be changed throughout the testator’s life Beneficiaries can be removed…and returned…and removed…. Property listed in a will can be sold or given away before the testator’s death

Wills, Trusts, and Estates Administration, 3e Herskowitz 6 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. What If You Die Without A Will? You’ll die “intestate” The laws of intestate succession will control the distribution of your estate

Wills, Trusts, and Estates Administration, 3e Herskowitz 7 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Consequences of Dying Intestate State law determines the method by which death taxes are paid A will, however, can have an “apportionment clause” which allocates the tax burden, if any, between beneficiaries

Wills, Trusts, and Estates Administration, 3e Herskowitz 8 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Consequences of Dying Intestate State law determines who gets your property Wills are for your “loved ones,” but intestacy is for your “issue” or heirs

Wills, Trusts, and Estates Administration, 3e Herskowitz 9 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Consequences of Dying Intestate State law controls guardianship of minor children A will, however, can appoint a guardian over property used to benefit minor children and, if both parents are dead, a guardian for minor children

Wills, Trusts, and Estates Administration, 3e Herskowitz 10 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Consequences of Dying Intestate There can be no testamentary trust A will, however, can provide a method to manage and distribute key assets at the direction of a trustee

Wills, Trusts, and Estates Administration, 3e Herskowitz 11 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Consequences of Dying Intestate The probate court picks the administrator to handle the estate A will, however, can appoint an executor, someone the testator trusts to handle the estate

Wills, Trusts, and Estates Administration, 3e Herskowitz 12 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Consequences of Dying Intestate Funeral arrangements are left to the living to decide (and sometimes fight about) A will, however, can state funeral and burial desires CAUTION! It may be a bad idea to put funeral arrangements in a will. Instead do arrangements in advance