Areas of Practice

 

Frequently Asked Questions on Wills

 
What does a will accomplish?
 
A will has two important purposes: 1) it states who will receive the property of the testator upon his 
death; and, 2) it designates someone (Personal Representative) who will be responsible for collecting 
the property and passing in on the beneficiaries. There are other considerations:

A will also names a Guardian for children or dependants. Such wishes can be followed in certain 
circumstances. It will not override another legal arrangement such as a custody agreement.

There is also a psychological need for a will. This can resolve any disputes. Especially in the event of a 
long term sickness prior to death. For example, a care taker stating they had a special arrangement or 
gift. 
 
Legal Requirements:
 
18 years of age or older and of sound mind. It must be in writing and signed by the testator. It must be 
signed by two witnesses.

Holographic or handwritten wills are legal. They should entirely be done in a personís handwriting. 
These should be avoided. 
 
Are wills required to be registered (or deposited)?
 
After 1984 wills can no longer be deposited with the Court. Wills that were on deposit will remain. 
 
Where is the best place to keep a will?
 
It is really up to the individual where he or she keeps his or her will. It is important that the individual 
choose a safe place where someone else can find the will after his or her death. Someone the individual 
trusts should know that the will exists and where it is located. Some people keep their wills in safety 
deposit boxes. Keep in mind that if the will contains provisions which must be known immediately upon 
the individual's death, a safety deposit box may not be the most suitable place to keep the will. This is 
because it may be time consuming for someone whose name is not on the safety deposit box to gain 
access to it.
 
What can I do to make sure that the Schiavo / Schindler situation does not happen to me and to my family?
 
Unfortunately, Terri Schiavo did not leave written instructions (an "advance directive") expressing how she 
would like to be cared for if something catastrophic happened to her. Because she did not leave 
instructions, the courts had to intervene to determine what she would want. Further complicating matters, 
her family did not agree on what her wishes would be, causing an incredibly painful situation for all involved. 
By taking the proper steps now, you can ensure that your wishes are known. Those steps include 
completing advanced directives, such as a living will and/or a health care power of attorney, and then 
discussing your choices with your loved ones so they can understand and support your wishes if you are 
unable to communicate for yourself.
 
Will Maintenance: After Your Will Is Written
 
Once you've made a will, don't put it away and forget about it. Review the document from time to time 
to make sure that changes in your life will not affect the terms of your will. 

What You Should Know

You may need to modify your will if:

∑ You marry, divorce, separate from your spouse, remarry, or are widowed. 

∑ Any of your beneficiaries die. 

∑ There are any additions to your family or the families of your heirs. 

∑ Your executor dies or moves to a different state. 

∑ You move to a different state. Your will should conform to the laws of the state in which you have 
  your legal home. 

∑ You think changes in federal or state laws might affect your will. 

∑ Your assets increase or diminish. If you want to give a specific amount of money to a beneficiary, you 
  must be sure that there will be enough money to cover the bequest. To avoid coming up short, you may 
  want to calculate any bequests as percentages of your total estate. 

∑ You change your mind about any of your beneficiaries. 
 

Probate FAQ

 
You may have heard that you should avoid probate, but you may not even be sure what probate is. 
Here are the basics.
 
What's Below:
 
  What is probate?
 
  Does all property have to go through probate when a person dies?
 
  Who is responsible for handling probate?
 
  Should I plan to avoid probate?
 
  Ways to Avoid Probate.
 
What is probate?
 
Probate is a legal process that takes place after someone dies. It includes: 

∑ proving in court that a deceased person's will is valid (usually a routine matter) 

∑ identifying and inventorying the deceased person's property 

∑ having the property appraised 

∑ paying debts and taxes, and 

∑ distributing the remaining property as the will (or state law, if there's no will) directs. 

Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees 
are paid from estate property, which would otherwise go to the people who inherit the deceased 
person's property.

Probate usually works like this: After your death, the person you named in your will as Personal 
Representative -- or, if you die without a will, the person appointed by a judge -- files papers in the 
local probate court. The Personal Representative proves the validity of your will and presents the court 
with lists of your property, your debts, and who is to inherit what you've left. Then, relatives and 
creditors are officially notified of your death.

Your Personal Representative must find, secure and manage your assets during the probate process, 
which commonly takes a few months to a year. Depending on the contents of your will, and on the 
amount of your debts, the Personal Representative may have to decide whether or not to sell your real 
estate, securities or other property. For example, if your will makes a number of cash bequests but your 
estate consists mostly of valuable artwork, your collection might have to be appraised and sold to 
produce cash. Or, if you have many outstanding debts, your Personal Representative might have to sell 
some of your property to pay them.

In most states, immediate family members may ask the court to release short-term support funds while 
the probate proceedings lumber on. Eventually, the court will grant your Personal Representative 
permission to pay your debts and taxes and divide the rest among the people or organizations named in 
your will. Finally, your property will be transferred to its new owners.
 
Does all property have to go through probate when a person dies?
 
No. Most states allow a certain amount of property to pass free of probate, or through a simplified 
probate procedure. In California, for example, you can pass up to $100,000 of property without 
probate, and there's a simple transfer procedure for any property left to a surviving spouse.

In addition, property that passes outside of your will -- say, through joint tenancy or a living trust -- is 
not subject to probate. For a discussion of the most popular probate-avoidance methods, see Ways to 
Avoid Probate.
 
Who is responsible for handling probate?
 
In most circumstances, the Personal Representative named in the will takes this job. If there isn't any 
will, or the will fails to name an Personal Representative, the probate court names someone (called an 
administrator) to handle the process. Most often, the job goes to the closest capable relative or the 
person who inherits the bulk of the deceased person's assets. 

If no formal probate proceeding is necessary, the court does not appoint an estate administrator. 
Instead, a close relative or friend serves as an informal estate representative. Normally, families and 
friends choose this person, and it is not uncommon for several people to share the responsibilities of 
paying debts, filing a final income tax return and distributing property to the people who are supposed 
to get it.
 
Should I plan to avoid probate?
 
Probate rarely benefits your beneficiaries, and it always costs them money and time. Probate makes 
sense only if your estate will have complicated problems, such as many debts that can't easily be paid 
from the property you leave.

Whether to spend your time and effort planning to avoid probate depends on a number of factors, most 
notably your age, your health and your wealth. If you're young and in good health, adopting a complex 
probate-avoidance plan now may mean you'll have to re-do it as your life situation changes. And if you 
have very little property, you might not want to spend your time planning to avoid probate. Your 
property may even fall under your state's probate exemption; most states allow a certain amount of 
property to pass free of probate, or through a simplified probate procedure.

But if you're in your 50s or older, in ill health or own a significant amount of property, you'll probably 
want to do some planning to avoid probate.
 
Are there advantages to Probate?
 
Notice to all possible claimants. The PR has a duty to publish notice to creditors once a week for three 
successive weeks in a newspaper of general circulation in a county of appointment. This notifies 
creditors to present their claims within four months after the date of publication. After publication, the 
creditor may be barred unless the claim is brought within four months. 

Additionally, Probate avoidance may also be expensive. 
 

Ways to Avoid Probate

 
An introduction to the most popular methods.
 
Beneficiary Deed
 
Allows for transfer of real estate on the death of whoever the owner designates as the beneficiary. It 
avoids the probate process often required for transfer of real property. A Beneficiary Deed can easily 
be revoked. See below for problems with Joint Tenancy with Right of Survivorship.
 
Payable-on-Death Bank Accounts
 
Payable-on-death bank accounts offer one of the easiest ways to keep money -- even large sums of it 
-- out of probate. All you need to do is fill out a simple form, provided by the bank, naming the person 
you want to inherit the money in the account at your death.

As long as you are alive, the person you named to inherit the money in a payable-on-death (P.O.D.) 
account has no rights to it. You can spend the money, name a different beneficiary, or close the 
account.

At your death, the beneficiary just goes to the bank, shows proof of the death and of his or her identity, 
and collects whatever funds are in the account. The probate court is never involved.

If you and your spouse have a joint account, when the first spouse dies, the funds in the account will 
probably become the property of the survivor, without probate. If you add a P.O.D. designation, it will 
take effect only when the second spouse dies.
 
Retirement Accounts
 
When you open a retirement account such as an IRA or 401(k), the forms you fill out will ask you to 
name a beneficiary for the account. After your death, whatever funds are left in the account will not 
have to go through probate; instead, the beneficiary you named can claim the money directly from the 
account custodian.

If you're single, you're free to choose whomever you want as the beneficiary.

If you're married, your spouse may have rights to some or all of the money:

∑ If you have a 401(k) account, your spouse is entitled to inherit the money unless he or she agrees, in 
  writing, to your choice of someone else. 

∑ If you live in a community property state, chances are your spouse owns half of what you have socked 
  away in a retirement account. (Community property states are Arizona, California, Idaho, Louisiana, 
  New Mexico, Nevada, Texas, Washington and Wisconsin; in Alaska, couples can sign an agreement 
  making some or all of their property community property.) If any of the money you contributed was 
  earned while you were married, that money remains "community property," and your spouse owns half. 
 
Transfer-on-Death Registration of Securities
 
Almost every state has adopted a law (the Uniform Transfer-on-Death Securities Registration Act) that 
lets you name someone to inherit your stocks, bonds or brokerage accounts without probate. It works 
very much like a payable-on-death bank account. When you register your ownership, either with the 
stockbroker or the company itself, you make a request to take ownership in what's called "beneficiary 
form." When the papers that show your ownership are issued, they will also show the name of your 
beneficiary.

After you have registered ownership this way, the beneficiary has no rights to the stock as long as you 
are alive. You are free to sell it, give it away, or name a different beneficiary. But on your death, the 
beneficiary can claim the securities without probate, simply by providing proof of death and some 
identification to the broker or transfer agent. (A transfer agent is a business that is authorized by a 
corporation to transfer ownership of its stock from one person to another.)
 
Joint Tenancy with Right of Survivorship
 
Property owned in joint tenancy automatically passes, without probate, to the surviving owner(s) when 
one owner dies. Joint tenancy often works well when couples (married or not) acquire real estate, 
vehicles, bank accounts, securities or other valuable property together. Setting up a joint tenancy is 
easy, and it doesn't cost a penny.

After one joint owner dies, generally all the new owner has to do is fill out a straightforward form and 
present it, with a death certificate, to the keeper of ownership records: a bank, state motor vehicle 
department, or county real estate records office.

Joint tenancy is usually a poor estate planning choice when an older person, seeking only to avoid 
probate, is tempted to put solely owned property into joint tenancy with someone else. Adding another 
owner this way creates several potential headaches:

∑ You're giving away part ownership of the property. The new owner has rights that you can't take 
  back. For example, the new owner can sell or mortgage his or her share -- or lose it to creditors. 

∑ You may have to file a gift tax return. If the value of the interest you give to a new co-owner (except 
  your spouse) exceeds $11,000 in one year, you must file a gift tax return with the IRS (unless you're 
  adding a joint tenant to a bank account to which you deposited the money; in that case, no gift is made 
  until the other person withdraws money). No tax is actually due, however, until you leave or give away 
  a very large amount (currently, more than $1 million) in taxable gifts. 

∑ It may spawn disputes after your death. Many older people make the mistake of adding someone as a 
  joint tenant to a bank account just for "convenience." They want someone to help them out by 
  depositing checks and paying bills. But after the original owner dies, the co-owner may claim that he or 
  she is entitled, as a surviving joint tenant, to keep the funds remaining in the account. In some instances, 
  maybe that's what the deceased person really intended -- it's too late to ask. (If you want to give 
  someone authority to use your money on your behalf, use a power of attorney. 
 
Tenancy by the entirety
 
In some states, married couples often take title not in joint tenancy, but in "tenancy by the entirety" 
instead. It's very similar to joint tenancy, but can be used only by married couples. Both avoid probate 
in exactly the same way.
 
Community property with right of survivorship
If you are married and live or own property in Alaska, Arizona, California, Nevada or Wisconsin, 
another way to co-own property with your spouse is available to you: community property with the 
right of survivorship. If you hold title to property in this way, when one spouse dies, the other 
automatically owns the asset. Transferring title to the surviving spouse is simple and doesn't require 
court proceedings.
 
Revocable Living Trusts
Living trusts were invented to let people make an end-run around probate. The advantage of holding 
your valuable property in trust is that after your death, the trust property is not part of your estate for 
probate purposes. (It is, however, counted as part of your estate for federal estate tax purposes.) 
That's because a trustee -- not you as an individual -- owns the trust property. After your death, the 
trustee can easily and quickly transfer the trust property to the family or friends you left it to, without 
probate. You specify in the trust document, which is similar to a will, who you want to inherit the 
property.
 
Gifts
 
Giving away property while you're alive helps you avoid probate for a very simple reason: if you don't 
own it when you die, it doesn't have to go through probate. That lowers probate costs because, as a 
general rule, the higher the monetary value of the assets that go through probate, the higher the expense. 
If you give away enough assets, your estate might even qualify for a streamlined "small estate" probate 
procedure after your death. (These procedures are discussed below.)

If you are considering making lots of large gifts, you should know that giving more than $11,000 to any 
one recipient in one calendar year will require filing a federal gift tax return. You won't actually have to 
pay any tax now.
 
Simplified Procedures for Small Estates
 
Almost every state now offers shortcuts through probate -- or a way around it completely -- for "small 
estates." Each state defines that term differently. Because of the way the laws are written, however, 
many large estates, worth hundreds of thousands of dollars, are eligible for special transfer procedures 
that speed property to inheritors. Arizona is $50,000.

There are two basic kinds of probate shortcuts for small estates:
 
Claiming property with affidavits -- no court required
 
If the total value of all the assets you leave behind is less than a certain amount, the people who inherit 
your personal property -- that's anything except real estate -- may be able to skip probate entirely. The 
exact amount depends on state law, and varies hugely. If the estate qualifies, an inheritor can prepare a 
short document stating that he or she is entitled to a certain item of property under a will or state law. 
This paper, signed under oath, is called an affidavit. When the person or institution holding the property 
-- for example, a bank where the deceased person had an account -- receives the affidavit and a copy 
of the death certificate, it releases the money or other property.
 
Simplified court procedures
 
Another option for small estates (again, as defined by state law) is a quicker, simpler version of 
probate. The probate court is still involved, but it exerts far less control over the settling of the estate. In 
many states, these procedures are straightforward enough to handle without a lawyer, so they save 
money as well as time.
 
Probate-Avoidance Method Summary
Beneficiary Deed Easy to create. Easy to revoke. Preferable over Joint Tenancy with Right of Survivorship.
Beneficiary designations for bank accounts, retirement accounts and securities Easy to create, using a form provided by the bank, broker or agency. Not available for securities in a few states.
Joint tenancy with right of survivorship Easy to create. If you don't already own property in joint tenancy, you may not want to add another owner, who could sell his share. For larger estates, there are negative gift tax consequences, too. Can be a problem if a co-owner becomes incapacitated. No probate avoidance if all joint owners die at once.
Tenancy by the entirety Easy to create. Available only in some states; limited to married couples. Can be a problem if one spouse becomes incapacitated.
Community property with right of survivorship All the benefits of community property ownership plus probate-avoidance when one spouse dies. Available only to married couples in Alaska, Arizona, California, Nevada and Wisconsin.
Revocable living trust Flexible, private. Easy to create. You keep control over property during your life. Some paperwork involved. May need attorney if your estate is complicated.
Gifts of property made while you're alive Reduces amount of property in your estate, which avoids both probate and estate taxes. You lose control over property given away. Large gifts use up part of your federal gift/estate tax exemption.
State laws that allow simplified probate proceedings These apply only to small estates; you may still 
need an attorney to explain your state's laws.
 
 

Gravina Law | Areas of Practice | Testimonials | Location | FAQ | Links | Contact | Pictures | Articles