Wills and Provisions - Module 1 of 5

MODULE 1: WILLS AND WILL PROVISIONS

Overview of Wills

A Last Will and Testament, usually simply referred to as a will, is a document effective at a person’s death that provides for disposition of assets not otherwise disposed of by other means or state law. Assets disposed of by will must be owned by the person outright, not jointly with another person. A will does not govern the transfer of non-probate property, which by operation of law or contract, pass to someone other than the estate at death (such as in the case of bank accounts or insurance policies with beneficiary designations).[1]  

The creator of the will is referred to as the testator, or sometimes the “testatrix,” if female. A typical will names persons or organizations as beneficiaries, to receive the testator’s assets in the manner and amount specified. The will also names an executor, personal representative or administrator whose responsibility it is to settle the testator’s estate according to the terms of the will, if there is one, or under the state laws of intestacy if there is no will. The administrator’s duties include gathering assets, managing businesses, paying debts, filing tax returns and transferring the remaining property in the estate to the beneficiaries.[2]

Wills may include other provisions which are either required by law or are important to the testator. For example, wills usually contain provisions that describe the powers and responsibilities of the executor under state law. Wills may also specify the testator’s wishes with regard to funeral arrangements, organ donation and guardians for minor children and can establish trusts that can be established and funded after death.

Probate and the Uniform Probate Code

Estate administration, or probate, is the process of administering the estate governed by a will at a person’s death. The laws of the state in which a person resides will govern the requirements for creating a valid will as well as the process of administering the will and estate at death. State laws vary in their requirements.

Many states have adopted some part or all of the Uniform Probate Code.[3] This Code, created by the Uniform Laws Commission, is not law. It merely suggests provisions for states to enact related to wills and probate. The Code covers such topics as the requirements for valid wills, the rules of administration for estates of decedents without wills and how property passes at death.

Twenty states, including Arizona, Colorado, and South Carolina, have enacted some part or all of the original Uniform Probate Code, one of its more recent amendments or a substantially similar law.[4] Often, states adopting the Code have made changes to the Code’s suggested provisions before enactment. As a result, even supposedly “uniform” laws are not completely uniform.  

In addition, many states have not adopted the Uniform Probate Code. The laws of these states generally cover the same topics as the states who have adopted the Code, but the specifics of the law may be very different. All states, though, have laws relating to wills, intestate succession or probate.[5] The Uniform Probate Code’s provisions cover all three.  

A person who dies owning a legally valid will has died testate, and her probate follows the rules of “testate succession.” Dying testate allows a person’s wishes to be known and followed within the framework of state law. For example, in probating a testate estate, a court will direct the distribution of the testator’s property as specified in the will, provided that the distribution plan doesn’t violate state law. So, for example, a testator may specify that his property is to be split equally between a spouse from a second marriage and adult children from a first marriage, or between biological children and step-children, even though those may not be the default rules under state law.

In addition, a will usually nominates someone to serve as the executor of the estate, often a preferred family member or friend. This nominated executor will be given preference in appointment by the court over other potential candidates, so long as she meets the court’s basic requirements of competence.[6]

The Rules of Intestacy

A person who dies without a valid will has died intestate, and her estate will be subject to the laws of intestate succession. This includes people who have died without creating a will and people whose will is not legally valid for any of a variety of reasons, such as that it is not signed, improperly witnessed or executed under duress or undue influence.[7] An intestate estate is still subject to court-overseen administration, but the court will administer the estate pursuant to the default distribution rules, regardless of what the deceased person may have wanted.

States typically design their intestacy laws to direct a decedent's property to his family.  Such laws invariably give priority to the decedent’s spouse and children, if any, dividing the assets between them in proportions that vary from state to state. Some states, for example, allocate half the estate to the spouse and the other half to the children, while others set aside a base amount for the spouse before splitting the rest.[8]

Only if a person dies without a spouse or children do intestacy laws consider other, more remotely-related people. These statutes work well for many people, giving the deceased person’s assets to those he may have chosen in any case.[9]  

The Uniform Probate Code strongly favors the rights of a surviving spouse over those of children. The Code provides that the intestate share of a decedent’s surviving spouse is the entire estate in two cases:

-       where the deceased person has no surviving parents or descendants, and

-       where all of the deceased person’s living children are also the spouse’s children.[10]

Presumably, this is based on the theory that the surviving spouse has as strong an incentive to provide for the mutual children as did the deceased.  

If there are living children, but they are children of the deceased person only and not the spouse (as in the case of a second marriage), under the Code, the spouse’s share is the first $150,000, with the remainder to be split, one-half to the surviving spouse and the other half among the children. Under the Code, living parents of the deceased person may be entitled to a small share of the estate if the deceased person died without living children, but with a living parent.

States that have not enacted the Uniform Probate Code, and states that have enacted a modified version of the Code, may have somewhat different provisions and allocations.  

For example, under Florida law, as under the Code, a surviving spouse inherits the entire estate if the deceased person has left behind no living children or only living children who are also the spouse’s children. If there are living children who are not also the spouse’s children, however, the spouse is not guaranteed a minimum amount but takes one half of the estate while the surviving children split the other half.[11] In another difference from the Code, Florida law does not provide for parents to inherit from their children unless the child dies without a spouse or descendants.

Similarly, Maine provides a spouse with the entire estate where there are no living children or parent of the deceased person. If there are surviving children of a deceased person who are also the spouse’s children, the spouse receives fifty thousand dollars and splits the balance with the surviving children, a departure from the Code.[12]  

It should be noted that, under most laws of intestacy, if children are entitled to share the deceased person’s property, only biological and adopted children are included in the definition of “children.” Step-children are generally not entitled to a portion of the estate, even if the deceased person considered them children and would have wanted them to have a share.[13] People are, of course, free to include step-children in their wills if they so desire, which makes wills important for people with atypical family structures.

In an intestate estate, any person with an interest in an estate, including family, friends, and even third parties, such as creditors, can petition to open the estate and serve as the executor.[14] A court will appoint the executor of the estate without accounting for deceased person’s wishes, since those are not expressed in a will. As a result, it is possible that a non-preferred person will be appointed and given the power to administer the estate, such as a creditor, with a court overseeing the administration to ensure it is managed properly.

Non-Marital Children

Historically, marital children were given preference over non-marital children in matters of estate succession.

In the Supreme Court case of Trimble v. Gordon,[15] Gordon died intestate, leaving behind no spouse or children, just a girlfriend with whom he had one acknowledged, but non-marital, daughter. The girlfriend opened a probate proceeding, seeking to have the daughter named as the beneficiary of Gordon’s estate. However, the probate court named Gordon’s mother, father, siblings, and half-brother as the beneficiaries of the estate pursuant to Illinois law at the time, which only allowed “illegitimate” children (as they were referred to at the time) to inherit from a female parent or her ancestors.

On appeal, the Supreme Court struck down the Illinois law as unconstitutional. The case had strong implications for intestate inheritance purposes. Prior to the decision, in many states, “illegitimate” children who asserted they were fathered by a deceased male could not inherit his property. After the decision, illegitimate children were able to inherit alongside legitimate children.

It should be noted that while states cannot ban non-marital children from inheriting, states can (and usually do) require some level of proof of paternity before allowing intestate inheritance.[16]

Will Provisions

Every state has laws related to wills, including requirements for a valid will and the types of provisions that must or may be included. Although state laws vary, most valid wills have most or all of the following common provisions.

1.    Title

Wills are typically titled “Last Will and Testament of” with the Testator’s name. This allows a third party to easily identify the creator and purpose of the document.

2.    Declaration

The first line of a will, the declaration, names the person creating the will, including her address, to confirm her state of residence. This provision often identifies the document as a will and often revokes other previously-created wills. This provision confirms the testator’s intent to make a will, which is an element of every valid will.

3.    Family

Many wills include provisions that identify the immediate family of the testator, including spouses and children, if any. There may also be statements as to others whom the testator intends to treat as family for purposes of the will, such as step-children or siblings.

4.    Tangible Personal Property

A will can dispose of personal property as part of the general estate or through a separate provision. Some states allow a Testator to dispose of tangible personal property, such as clothing, furniture, jewelry, and other possessions, by way of a separate document that is incorporated into the will by reference.[17] Such lists allow a testator to change the list if she changes her mind about the disposition, without having to contact an attorney to redraft the will itself.

5.    Specific Gifts

Often, testators want to give specific gifts to beneficiaries. These can include gifts of cash, stock and other personal property not included on a property list. The will can identify the gift and to whom it is to be distributed, with wording such as “Five hundred dollars to my nephew, Robert” or “All of my stock in ABS Company to my friend, Mary Allen.” Any effective identification is sufficient, and full names, addresses and other identifying information is not necessary.

6.    Real Property

The will may identify real property not owned jointly with another person, by address or legal description, and to whom the property should be distributed.

7.    Trusts

A will may establish testamentary trusts, effective after the Testator’s death, which hold assets for the benefit of one or more beneficiaries. Some testamentary trusts are created for tax reasons, while others may be created for minor children or for beneficiaries with special needs. The will must specify how the trust is to be funded and managed, who will benefit from the trust and how and when the trust will be terminated.

8.    Residuary Clause

The residuary clause distributes to the named “residuary” beneficiaries all of the remaining property of the estate not otherwise disposed of by previous will provisions.

9.    Guardianship

A Testator with minor children may include a provision naming a guardian in the event the children have no living parent to care for them.

10. Executor

A will should name an executor or personal representative who will be responsible for the administration of the estate, along with at least one alternate in the event that the named executor is unable to perform his duties.

11. Trustee

If the will creates a trust, it will also include a provision naming at least one Trustee, the person who will manage the trust, as well as at least one alternate Trustee in the event that the named Trustee can no longer serve.

12. Powers

Since one of the main purposes of the will is to provide for administration of the probate estate, including payment of creditors and distribution of assets, an executor can be given a broad range of powers to enable him to fulfill his duties, such as powers of investment and sale. These powers may be listed in detail or they may instead be incorporated into the will by reference to a comprehensive list in the state’s probate statute.

13. Funeral Wishes

Some wills may specify funeral and organ donation wishes of the testator.

14. Execution, Witnesses, and Notarization

Although states’ requirements for execution may differ, most wills must be signed and dated by the testator, in her own handwriting. The will must be witnessed, usually by two or three witnesses. Wills are often notarized, as well.

15. Self-Proving Affidavit

Most states allow some version of a “self-proving affidavit” to be attached to a will. In the affidavit, witnesses testify, under penalty of perjury, that the will has been voluntarily created and is validly executed. This affidavit, when attached to a will, takes the place of witness testimony when the will is submitted for probate after the testator’s death, thereby easing the burden and cost of locating the original witnesses to the will, often many years after it is signed.

            In our next module, we’ll continue our discussion of wills with an overview of the types of wills and an in-depth discussion of the requirements for validity.