A will is the most common document used to specify how an estate should be handled after death. Anyone designated to receive property under a will (or trust) is called a beneficiary. A will can be simple or elaborate, depending upon the size of the estate and the wishes of the person who makes it, called the testator. Many types of post-death instructions can be described in a will. A will can describe who should receive specific items of furniture, art work, or jewelry. A will can name a guardian who will take care of minor children should there be no surviving parent. A will can disinherit a child if the testator does not want the child to receive any part of the estate. The options for what a person can do with a will are varied but limited.
Requirements for a Valid Will
Each state sets slightly different formal requirements for the creation of a legal will. In Texas, any person who is at least 18 years old or is or has been lawfully married; or who is a member of the armed forces of the United States, the auxiliaries thereof, or the maritime service at the time the will is made can make a legal will. In addition, he or she must be of sound mind, which means that the person has no disability that prevents him or her from understanding the full nature of the will document. In Texas, a will must be in writing and must be signed by the testator in person or by another person for the testator at the testator’s direction in the testator’s presence. The will also must be witnessed, in the special manner provided by law, by at least two other people. A handwritten will, often called a holographic will, is valid in Texas provided that it is wholly in the handwriting of the testator. A will is valid until it is revoked or superseded by a new will. Individual provisions can be changed by a codicil, described in the section Changing and Updating Wills.
It is not necessary to hire an attorney to create a will. A non-attorney can create a will, but he or she must pay close attention to the details outlined above. Smaller estates can be described simply, and making a will to disperse a smaller estate can be done by almost anyone. The simplest will in history ever to be declared valid by a court contained only three words: “All to wife.” However, a lawyer’s guidance is very helpful with complicated property holdings or an estate with many assets, especially if they are located in several different places. In these cases, an attorney’s help can ensure that the transfer of property described in the will is done in a way that minimizes the survivor’s tax liability. In addition, a complicated estate may require documents other than a will, such as a trust agreement, to ensure that all of a person’s wishes are carried out.
A will typically appoints someone called a personal representative, or executor, to carry out the specific wishes of the person who has died–the decedent. The personal representative should be a trusted friend or family member who should be made fully aware of his or her duties before the decedent dies. Under state law, a personal representative may not be incapacitated, a convicted felon, a non-resident of Texas unless he or she appoints a resident agent to accept service of process in all actions or proceedings with respect to the estate and files such appointment with the court, a corporation not authorized to act as a fiduciary in Texas, or any other person the court finds unsuitable. A personal representative must do many things, including collect and manage the decedent’s assets; collect any money owed at the time of death; sell assets, if necessary, to pay estate taxes or expenses; and file all required tax returns. Because a personal representative is allowed to charge a fee for doing this work, choosing a friend or family member who is also a beneficiary to fill this role may be a good choice, as he or she may not charge the full amount allowed by law. To ensure that one’s estate has a personal representative chosen by the decedent, it is wise to name one or more contingent personal representatives who can take over the responsibilities of the primary personal representative if the primary personal representative is unable to assume the responsibilities of the position.
If a person does not name a personal representative in his or her will, state law establishes the order in which a probate court appoints persons to act as personal representative.
Appointing a Guardian for Children
A person with minor or dependent children can name in a will a guardian to care for those children should there be no surviving parent. If a person fails to name someone to assume the role of guardian, the probate court appoints someone. The person chosen by the court usually will be a close relative or friend, but it may not be the person the parent would have chosen. As with the selection of a personal representative, it is important that the potential guardian understands the provisions of the will and is willing to accept the responsibilities of being a guardian. Also, it is wise to name an alternate guardian should the primary guardian be unable to accept the responsibility. Of course, the selection of a guardian for children is likely to influence how the parent wants to distribute his or her property. Otherwise, a decedent’s money might go to one person while his or her children go to another person. The parent may want to give property to someone only if the recipient accepts guardianship of a child. In this way, the guardian is given the financial resources to care for the child.
Planning for Incapacity
People drafting wills often use the opportunity to plan for the possibility of their own incapacity. By preparing a document called a durable power of attorney, they can give another person of their choosing full legal authority to act on their behalf should they become unable to handle their personal and financial affairs. Without a durable power of attorney, a person’s family might need to go to court to have someone appointed to handle the person’s legal affairs. If a durable power of attorney is made part of the will, it is essential that the will be made known to family members before the testator becomes incapacitated. If a will is kept secret, locked away in a safe deposit box until a person dies, it will be too late for the durable power of attorney provisions to be useful.
Some people also use a document called a durable power of attorney for health care to make health care decisions in advance should they subsequently become incapacitated. Creating a durable power of attorney for health care is discussed in the Elder Law Chapter.
Restrictions on Wills
In order to protect spouses and dependent children, some states prevent a person from entirely disinheriting a spouse or child without the consent of the one who is disinherited. Under Texas law, however, a person may disinherit any heir, including a spouse or dependent child.
There are restrictions on wills in Texas. Anything owned in joint tenancy with another person passes under a will unless the joint tenants had earlier agreed in writing that the interest of a joint tenant would pass to the surviving joint tenants. No such agreement is inferred from the fact that the property is held in joint tenancy. Because there may be significant tax consequences, these agreements or lack thereof should be made only after consulting an attorney.
Other possessions are not considered part of the estate because they already are promised to someone else. For example, a testator cannot specify in a will that someone other than the beneficiary of a life insurance policy gets the benefits described in that policy. However, a person can designate his or her estate as the beneficiary of a life insurance policy. In this case, the money from the policy will be added to other estate assets and will be distributed according to the will. Similarly, the money from a retirement plan goes to the persons named in the plan, regardless of whether they are beneficiaries in a will.
Laws designed to uphold public policy also limit what can be done with a person’s assets after death. For example, conditions in a will encouraging someone to do something illegal or immoral in order to inherit money or property would not be enforced.
Changing and Updating Wills
The provisions of a will are valid until they are changed, revoked, destroyed, or invalidated by the writing of a new will. Changes or additions to a will can be included in a document called a codicil. Codicils must be written, signed, and witnessed in the same way as wills. Wills cannot be changed simply by crossing out existing language or writing in new provisions. In order to avoid making a new will or codicil each time a person’s possessions change, a will can specify that personal property is to be distributed according to instructions outlined in a separate document. A person can then revise the separate document as often as necessary, without observing all of the formalities required to change the will itself.
If someone dies with a will that is not up-to-date, people may not be provided for adequately. For example, a person chosen to be a personal representative or guardian may have died or fallen out of favor with the author of the will, or a favorite charity may no longer be in existence. A significant amount of case law has dealt with how a probate court is to proceed with a will that has become unenforceable because of changed circumstances. These headaches can be avoided if a will is reviewed at least every two years and revised for major changes in tax laws or for personal events such as births, deaths, marriages, divorces, or significant changes in the size of the estate. It is also a good idea to review a will if its author moves to another state, because the new state of residency may have different inheritance and tax laws.
Dying Without a Will
If a person does not have a will or has not adequately planned for the distribution of his or her estate at death, survivors can face a complicated, time-consuming, and costly process. Often survivors wind up having to pay more taxes on their inheritance than they would have paid had there been a will or other estate planning tool. To provide for surviving friends and relatives, or to support favorite causes or charities, a person can plan for the distribution of his or her estate after death. With planning, an estate can be distributed as fairly as possible with as little tax burden as legally allowed.
When a decedent leaves no will or fails to dispose of all property through a will, the decedent is said to have died intestate. When a person dies intestate, the probate court steps in to divide the decedent’s estate, according to a formula known as the state inheritance laws. Under the state inheritance laws, the probate court uses formulas set by the legislature to divide a deceased person’s possessions among any surviving relatives.
A probate court applying the state inheritance laws first deducts from the estate the funeral expenses and any unpaid medical bills up to five thousand dollars, allowances made to the surviving spouse and children, estate administration expenses, taxes, and other debts owed.
After all the claims against the estate are paid, and if the decedent has a surviving spouse and no children, the surviving spouse is entitled to all of the personal estate (all possessions other than land) and one-half of the real estate of the decedent. The other half of the real property goes to the decedent’s parents or siblings and their descendants. If there are no surviving parents, siblings, or their descendants, then the surviving spouse receives the entire estate.
In addition, the community property of the deceased spouse passes to the surviving spouse if there are no other descendants or if all of the surviving children and descendants of the deceased spouse are also children or descendants of the surviving spouse. Otherwise, one-half of the community property goes to the surviving spouse and one-half goes to the children or descendants of the deceased spouse.
If there are children and no surviving spouse, the entire estate is divided among the children and their descendants. If all of the children are living, they share in the estate equally. If one or more of the children are deceased, their descendants split a share equal to the share their parent would have received if alive.
If there is both a surviving spouse and children, or their descendants, the surviving spouse receives one-third of the personal estate and the balance of the personal estate goes to the children of the deceased and their descendants. The surviving spouse also receives an estate for life in one-third of the land of the deceased, with remainder to the children and their descendants.
If the decedent leaves neither a spouse nor children, the estate goes to the decedent’s father and mother equally. If only one parent survives, then one-half goes to the surviving parent and the other half goes to the brothers and sisters of the deceased and to their descendants. If there are no siblings or their descendants, then the entire estate goes to the surviving parent. If neither parent survives, then the entire estate goes to the brothers and sisters and their descendants. If there are no siblings or their descendants, then the estate goes to the grandparents and their decedents. The line of inheritance continues in an attempt to locate the decedent’s nearest kin. Anyone entitled to inherit a portion of an intestate decedent’s estate is known as an heir.
Texas law distinguishes between kin of whole or half-blood. If an estate passes to descendants of both whole and half blood, each of those of half blood inherit only half as much as each of those of whole blood. If all of the descendants are of half blood, they inherit whole portions.
One problem with relying on a probate court applying state inheritance laws to distribute one’s estate is that it may not distribute the estate in the manner the decedent would have wanted. State inheritance laws only recognize relatives. The inheritance laws never permit the probate court to support a decedent’s close friend, lover, or favorite charities. If the decedent leaves no kin, the estate goes to the state. Clearly, for most people writing a will or creating a trust is advisable.