Wills

The Three Steps in Preparing a Will

At some point, everyone needs a Will, and having one prepared is usually quite simple. If you are ready to begin the process, please download the appropriate form using one of the large green buttons on the right under the Forms heading, or simply call or email me to request a form. Then fill out as much as you can and fax, email or mail it to me and I will get back to you asap to go from there. For more information about the process, keep reading!

I find it useful to divide the process of preparing a will into the following three steps:

Step One: Reviewing Your Assets

The purpose of a will is to provide for how your property will be distributed in the event of your death. Therefore, it is important to be sure that a will is the best way to accomplish that. In most cases, in fact, there are simple steps – outlined below – that you can take even without a will to finalize who will receive certain types of property that you own. A review of your assets is also important to determine whether you might benefit from (or possibly need) some extra estate planning, whether to avoid unnecessary taxes or to achieve other goals in the management of your property. This is why it is important to fill out the form.

Property Outside the Will: Two Main Types

There are two main types of property that are not controlled by the terms of a will:

Jointly Held Property: Real estate and bank or brokerage accounts and titled in the name of one or more owners. For example, many married couples own their home jointly or have joint bank accounts. Sometimes, parents add their children to the title of their home or bank accounts, as well. Any time property is titled jointly, if one of the joint owners dies, the other automatically becomes the owner of that property, regardless of what it may say in that person’s will. So the first step in reviewing your assets is to determine which property is covered by joint ownership and which is not.

[NOTE: There is also a common form of shared ownership called Tenants in Common, in which this rule does not apply, so that if one owner dies, his share goes to his heirs or other inheritors. Therefore, it is vital that you know how the property is titled.]

Beneficiary Accounts: Bank accounts and investment accounts (including retirement accounts) allow owners to identify a beneficiary (often called a pay-on-death beneficiary) who will automatically receive ownership of the account when the original owner dies. When a beneficiary is named, the account passes directly to the beneficiary outside the will.

Life Insurance works the same way – if a beneficiary is named, he or she will receive the proceeds of the policy directly, regardless of the terms of a will.

Other Types of Property: Aside from these two types of property, there are some other less common types that pass outside a will, as well. One example is a Life Estate, in which real estate can be titled in one person’s name during their life but in another person’s name thereafter. For more information about this, please call me anytime at 410-205-4830.

Step Two: Naming Beneficiaries

The next step is to decide who should receive your property. Generally, younger people in good health need not be specific, simply leaving all their property to a spouse, children, etc. The only restriction on choosing beneficiaries is that a spouse has the right to “elect against the will” – meaning, to receive a set percentage of the full estate if he or she would not receive as much, otherwise. But aside from this rule, a will can provide whatever you want with as much or as little detail as you like. The important thing to keep in mind, however, is the role of the Personal Representative, described in the Step Three.

Step Three: Choosing a Personal Representative, Guardian for Children and other Terms

The moment a person dies, say Jane Smith, her property is transferred from her ownership to “the estate of Jane Smith” (excluding property that passes outside the will, as described in Step One). It will remain in the ownership of “the estate of Jane Smith” until the process of Probate is complete, at which point the property will be distributed to the beneficiaries of the will.

The process of probate is actually fairly simple (in theory, anyway). First, the court appoints a Personal Representative (PR), generally the individual named in the will, if there was one. The PR’s job will be to inventory the estate, see to it that funeral expenses, debts and taxes are paid and eventually to distribute all remaining property according to the terms of the will. This job is carried out with extensive communication with the court (in Maryland, it is called the Orphan’s Court, often working through the Register of Wills) to ensure that everything is managed properly.

Thus, the most important part of preparing a will is often choosing the Personal Representative, as it will be their job to physically account for and manage all your property throughout the process and to eventually hand over each item to the appropriate beneficiary. For example, if a widow dies, leaving all her property to be divided equally among her three children, the Personal Representative is responsible to have everything in that person’s home distributed “equally” to the children. As you can imagine, this can be a painful process, with each child expressing preferences if not jealousies about who will receive which item. For this reason, many wills provide that the Personal Representative has final say in any disputes of this nature among the beneficiaries.

You should choose someone who is organized and comfortable overseeing financial affairs, though a lawyer and an accountant are often employed to handle things directly. And you should also choose someone who will understand as well as possible how you would want your personal belongings distributed among your beneficiaries in a manner that will promote the greatest comfort and satisfaction to them.