A will is a written document in which an individual, known as a testator, directs how his or her assets are to be divided and other matters are to be handled after his or her death. However, wills are not a do-it-all document. A testator should be aware of what should and shouldn’t be included in the will.
About 74% of Americans who lack a last will and testament reported that it is because they find wills and estate plans to be confusing topics. Therefore, it is important to clarify the terms of the will—what it includes and what it doesn’t.
Without a will, property will be distributed according to the state law, and its priorities could be very different from yours. Therefore, it is important to have a will and ensure that you make the important decisions about how your assets are to be distributed to benefit among your loved ones and any other interests.
The will is a critical part of an estate plan. It guides the distribution of assets and provides for beneficiaries upon one’s death.
There are certain assets and instructions that a testator should make sure to include in a will.
If these items aren’t covered in the will, it won’t be clear how they will be handled. State law might determine the outcome, or family members might dispute the treatment and have to ask a court to decide. Subject to be sure are addressed in the will are:
There are subjects that don’t belong in a will. The law provides other means by which these assets and issues are addressed, so any instructions in the will have no legal effect. For example, retirement accounts are inherited by whoever is named in the beneficiary designation form. Nothing written in the will affects who inherits those accounts.
Some other issues are in gray areas. You should ask an estate planner if the instructions in a will on these issues are controlling under the law of your state. Assets and instructions on the care of a pet are one subject. Some states allow these to be addressed in a will, while others say such instructions aren’t legally enforceable.
Funeral and burial instructions are another topic. Some states say such instructions in a will are legally binding, while others treat them as suggestions and recommendations. As a practical matter, a will is often read days or weeks after the testator’s death. It might not be reviewed before the final arrangements are made.
Keep in mind that a will is a public document. It must be filed with the probate court or other appropriate court in your locality. It will go through the probate process and is available for public inspection.
The probate process is crucial to how a will takes effect after the testator’s death. Probate is the legal process that ensures your debts are paid and the legal title of your assets is transferred to the appropriate heirs and beneficiaries. If you have a will, the probate process will determine whether the will is authentic and valid.
Therefore, having a clear understanding of the contents that are allowed and that belong in the will makes the probate process and process distributing assets run more smoothly.
Valuable contributions to this summary of “What Is and Isn’t Included in a Will?” were made by Bob Carlson, editor of the Retirement Watch financial advisory service and chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets.
Katie Kao is an editorial intern with Eagle Financial Publications.