What a Will Can and Cannot Do
A Will is a legal document which designates someone to take possession of everything you own when you die. Generally speaking the following are typically required for a California Will:
* The Will must be in writing
* The signing of the Will must be witnessed by two people who also sign the Will as witnesses
* The person creating the Will must have "testamentary capacity" which means that the person can identify family members, is aware of the property being given away, and understands that this document is giving away the property
Designate a Personal Representative
A Will usually designates a personal representative, also known as an "executor," to carry out the provisions of the will. California requires a personal representative and if there is no one named in the will, the court will appoint an appropriate person to serve in that capacity.
Direct Sale or Gift of Property
A Will can leave property such as a house, a cabin or a farm to a specific person or to an organization. It can also require a personal representative to sell property and also direct how the proceeds from the sale will be distributed. When real property is sold under a Will, a judge must approve of the terms of sale, and the real property is subject to public bidding in court.
Nominate a Guardian for Minor Children A will is commonly used to nominate a legal guardian for minor children. With an integrated estate plan, a trust and will work in concert, with the trust directing the long term financial care of minor children.
Place Property into a Trust A will can be an important backstop to a trust by directing a personal representative to place property into a trust. When someone has a living trust, that person must re-title property in the name of the trust. If the person forgets or otherwise fails to place property into a trust, a special kind of will called a pourover will directs the personal representative to turn over property to the trust so that it can be managed more flexibly.
A Will Cannot Change Beneficiary Designations
A Will cannot give property which is otherwise controlled by beneficiary designation documents. For example, most pensions and retirement accounts require beneficiary designations and those accounts will pass according to the beneficiary designation. They will not be impacted by language in the Will. Life Insurance works the same way. The proceeds from life insurance policies are not gifted through a Will. They are typically provided for in the beneficiary documents required by the insurance company.
A Will Cannot Provide for Long Term Care of Children
If a person leaves property to a young child in a Will, that property must be held in an inflexible government-regulated account for the benefit of the child. When the child reaches age 18, all money in that account will go to the child outright. In California the Will may designate that the money be held in the account for a longer period, but in no event may the money be held beyond the child's 25th birthday. Also, such funds are not protected from creditors, meaning that the money will be available to pay, for example, a judgment against the child if she or he gets into a car accident and is not completely covered by insurance.
Getting Legal Help
An Estate Planning Attorney can help you understand how best to preserve your assets and create a strategic estate plan for providing for those you love as well as caring for you if you become unable to manage your personal or financial affairs. Contact Gadi Zohar today to learn more.
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