Which Will Would You Choose?
If you or your loved ones have not yet created a will, you are not alone. In fact, according to a recent survey, not having created a will puts you among the majority of Americans. Learn more about why estate planning should be done early, often, and with attorney assistance to ensure it serves its purpose and stands up to scrutiny.
Why Fewer Americans Are Making a Will Caring.com’s 2024 Wills and Estate Planning Study found that only 32 percent of Americans currently have a will—a 6 percent decline compared to 2023 and the first drop since 2020.1 What is holding people back from making a will? The top reasons cited were
● procrastination (43 percent),
● a belief that they are too poor or do not have enough assets (40 percent),
● unsure how (16 percent), and ● costs too much (16 percent).2
For starters, anyone age 18 or older should have a will. Without one, the state decides what happens to your money, property, possessions, and minor children after your death. You lose the ability to decide things like who is responsible for winding down your affairs, who receives the things you own, and who cares for your children. Making a will is best handled by working with an experienced estate planning attorney. A simple will does not cost as much as you might think, especially when you consider the potential costs of not having one.
Making a will is best handled by working with an experienced estate planning attorney. A simple will does not cost as much as you might think, especially when you consider the potential costs of not having one. Types of Wills In some cases, your will can be typewritten, handwritten, or stated verbally to others. However, the laws in your state dictate the legal requirements for a will, including the types of wills that are recognized. A will that does not meet the formal requirements of the state you live in can be deemed invalid by the court, effectively leading to a scenario where you die intestate (i.e., without a will). If that happens, state law—not your intentions—could dictate what happens to your assets and your family should you die. Different types of wills include the following:
● A formal will is the most common type of will and is recognized in every state. In most states, it must be typewritten and signed by you (the testator) and two or three 1Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estateplanning/wills-survey/ (last visited Jul. 31, 2024). 2Id. witnesses. Some states require notarization. This is usually the type of will that experienced attorneys recommend, as it is the most widely accepted.
● A holographic will is written and signed in your own writing and may not require witnesses for it to be legally valid. Not all states recognize holographic wills, and in states that do recognize them, the requirements to create a valid holographic vary.
● A nuncupative will is stated orally, usually in a recording or to a witness. Most states do not recognize oral wills as valid. Those that do typically have narrow criteria for who can use them, such as members of the armed forces actively engaged in combat.
Potential Issues with Oral and Handwritten Wills Even if your state allows for handwritten or oral wills, they can pose problems. Often, the decision to use these types of wills occurs because somebody has put off creating a will until the last minute, and an emergency forces their hand. That is why they are sometimes called “deathbed wills.” Handwritten and oral wills, particularly if they were created last minute and not reviewed by an attorney, are more prone to mistakes and ambiguities that can cause confusion and make them harder—or impossible—to enforce. This is another reason you should not procrastinate when creating your will. When considering what can happen when you are not proactive about creating a will, the estate of Aretha Franklin offers a cautionary tale. When she passed away, the Queen of Soul left a handwritten will. Although her home state of Michigan recognizes them, scribbles, hard-to-read sections, and contradictory passages in her will forced her heirs into a protracted legal dispute to determine her true intentions. Research shows that up to 3 percent of all wills in the United States are contested in court.3 A contested will can not only undermine your original intentions but also potentially turn your loved ones against one another and lead to them spending their inheritance on legal fees. Professional Planning for Life’s Biggest Decisions Whether you have not yet made a will, are in the beginning planning stages, have a handwritten or oral will that you want to convert to a formal will, or need to revise a will due to life changes, our estate planning attorneys are here to make sure everything is done correctly. While estate planning is for everyone, every plan is different. For an estate plan that meets your long-term goals and provides peace of mind in the present, please reach out and schedule a meeting.
- Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estateplanning/wills-survey/ (last visited Jul. 31, 2024).
- 2Id.
- 3. Margaret Ryznar & Angelique Devaux, Au Revoir, Will Contests: Comparative Lessons For Preventing Will Contests, 14 Nev. L. J. 1 (Jan. 15, 2014), https://scholars.law.unlv.edu/cgi/viewcontent.cgi?article=1525&context=nlj.
Debunking Common Misconceptions About Wills
Estate planning is not just for the wealthy—or older adults, married couples, or any other single category of individual. Estate planning is beneficial for everyone. But this is just one of the many misconceptions people have about wills and estate plans. Read more about the misunderstandings of how wills function and what planning purposes they can be used for.
The majority of Americans do not have a will, and the number of US households with a will has been in steady decline.
At the outset, it is important to dispel a recurring myth about estate planning: It is not just for the
wealthy—or older adults, married couples, or any other single category of individual. Estate planning is beneficial for everyone. But this is just one of the many misconceptions people have about wills and estate plans; there are also misunderstandings about how wills function and what planning purposes they can be used for.
Myth #1: Wills can be used to avoid probate.
If you are like most Americans, you probably value your personal autonomy and want to minimize state involvement in your personal affairs—both in life and in death.
When someone dies without a will (known as dying intestate), the courts and state law determine who receives the deceased person’s home, retirement savings, personal property,and other assets. This is done through a process called probate.
Even if you pass away with a will, your estate must go through probate, although the process will not be nearly as heavy-handed as it would be for somebody who dies intestate. Your will lays out your wishes about what happens to your money and property instead of relying on your state’s law.
Probate is not necessarily bad in every jurisdiction. It costs money and can delay distributions to your loved ones. Still, it also helps to ensure that your estate is administered accurately and legally with the added oversight of the court.
That said, there are benefits to avoiding probate, and estate planning attorneys can recommend tools for doing so, such as trusts and beneficiary designations on financial accounts.
Myth #2: You cannot use a will for tax planning.
The certainty of death and taxes, as famously noted by Benjamin Franklin, is not quite as certain as the taxes you might owe at the time of your death.
Estate taxes, sometimes called death taxes, are applied to assets (your money and property) that you leave to others when you pass on, but the threshold net worth value when these taxes kick in is very high. In 2024, you will not owe federal estate and lifetime gift taxes until your taxable estate is over $13.61 million, and that exemption amount doubles for married couples.
Separate from, and in addition to, the estate tax is the generation-skipping transfer (GST) tax, which applies to asset transfers to recipients—typically grandchildren—who are two or more generations younger than you. In 2024, the GST tax exemption is also $13.61 million, or $27.22 million per couple. However, the federal estate, gift, and GST tax exemption amount is set to decrease sharply at the start of 2026 and revert to pre-2017 levels that are around half of what they are now. This anticipated decrease in the exemption amount might justify employing advanced estate planning strategies now, ahead of the 2026 sunset.
Before the current era of super-high exemptions, trusts were frequently used in estate planning to reduce or eliminate estate, gift, and GST taxes. These strategies are still generally available today, but wills can also be used for tax planning purposes.
Trusts can be created by an individual during their lifetime, in a revocable living trust, or upon their death, under the terms of their will. The latter—known as testamentary trusts—can be structured in various ways that may be utilized for estate and GST tax planning, particularly by married couples. Some examples of tax-planning will-based trust structures are as follows:
● A qualified terminable interest property (QTIP) trust is a type of trust established for the benefit of the surviving spouse. Assets transferred into a QTIP trust qualify for the unlimited marital deduction, mitigating estate taxes due upon the first spouse’s death. However, this may only defer estate taxes owed until the second spouse passes away.
● A decedent can leave their entire estate (or a large part) to their spouse. The surviving spouse can then disclaim, or say “no, thank you” to some or all of their inheritance from their spouse. This disclaimed portion goes into a bypass trust (which can go by many different names, such as credit shelter trust or family trust), which can benefit the surviving spouse (and can also benefit others, such as dependents) during their lifetime but will not be included in the surviving spouse’s estate at death. This trust may be created to use the willmaker’s lifetime exclusion amount at their death instead of the unlimited marital deduction.
● A trust can be established at your death that skips over your living children and directly benefits your grandchildren to avoid a double estate tax (once when passing to the next generation and again when passing to the generation after them). But because the GST tax exemption is separate from the lifetime estate and gift tax exemption, you can engage in advanced will-based planning to reduce or potentially eliminate the GST tax, allowing more money to flow to younger generations. Including tax-saving trusts in the provisions of a will can be quite complicated in practice, but will-based estate plans have a place in tax planning for every demographic.
Myth #3: Creating a will is cheaper than creating a trust.
Creating a basic will might be cheaper than creating a basic trust, but it is not an apples-toapples comparison.
It ultimately comes down to how complex your plan is. Trusts tend to be more complex than wills and, therefore, are typically more expensive to prepare. However, trusts and wills can often contain similar provisions that require a comparable amount of time to properly research and draft properly.
In addition to upfront costs, administration costs need to be factored in. Wills are subject to probate and can, therefore, be more expensive to administer. However, trusts may have ongoing costs such as managing investments, filing taxes, and accounting that simple wills likely do not have.
Rather than focusing on a set price, you should orient a plan around your specific circumstances and needs. Estate planning is not an area where it pays to cut corners, whether by using online planning tools or trying to make an overly simplistic plan when a more detailed plan is required.
You also need to consider the costs of not having an estate plan—or having a plan that falls bshort of your planning goals. To discuss those goals and how we can help you meet them, please reach out and schedule a consultation.
1 Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estateplanning/wills-survey/ (last visited Jul. 31, 2024).
Could a Will Be Right For You?
This estate planning tool retains its core purpose of transferring a person’s assets (money and property) to others after their death. Wills have stood the test of time—and for good reason: they are fundamental to controlling your assets and legacy. Learn more about what a will does—and does not do.
The term last will dates back more than a millennium to English common law, in which a person expressed what they “willed” to have happen to their property. The use of what we now know as a will dates back even further, to ancient Romans, who, under the Code of Justinian, recognized documents that transferred possessions from deceased male citizens to their heirs.
While some of the specific uses and terminology related to wills have changed over the years, this estate planning tool retains its core purpose of transferring a person’s assets (money and property) to others after their death. Wills have stood the test of time—and for good reason: they are fundamental to controlling your assets and legacy.
What a Will Does—and Does Not Do
The simplicity, flexibility, and clear instructions that a will provides for the disposition of assets explains why this tool is as relevant today as it was thousands of years ago.
If anything, as our lives and social networks have become more complex and the things we own have grown more numerous, the need to plan for death has been magnified. Throughout all the changes, however, the humble will has remained a cornerstone of estate planning.
Here is what a will allows you, as the creator of the will (or testator), to do:
● Name the individuals (or entities, like charities) you want to receive your assets upon your death
● Name an individual (the executor or personal representative) to be in charge of accounting for all your assets and liabilities and filing all necessary paperwork with the probate court
● Appoint a guardian to care for your minor children when you die, and name somebody to care for your pets after you pass.
Wills do have some limitations, so you should also understand what a will does not do in an estate plan:
● A will only governs assets held individually in your name without a beneficiary designation at the time of your passing.
● A will cannot dispose of the entire interest of assets that are owned jointly, especially those including rights of survivorship (i.e., with a spouse or child) or governed by beneficiary designations or other contracts. Named beneficiaries on life insurance and retirement plans, for example, take precedence over the terms of a will, as do payableon-death (POD) and transfer-on-death (TOD) designations on bank accounts.
● A will does not control who makes financial and medical decisions for you if you are alive but unable to make them yourself due to illness, injury, or age-related decline.
It is also important to note that wills only take effect at the time of your death. You cannot use them to transfer assets during your lifetime as you can with certain types of trusts. However, you can use will-based trusts, known as testamentary trusts, that the executor sets up according to the instructions in your will if you want your assets held for a beneficiary for a period of time or indefinitely.
Why a Will Might Be the Right Answer for You
If most of what you own will be distributed according to a beneficiary designation, POD or TOD designation, or by operation of law due to joint ownership, you may look at a will as a safety net in case some assets have to go through probate. If you have modest accounts or property, you may be okay with your loved one receiving their inheritance outright. You may think that putting too many restrictions will eat into the inheritance being left behind. It is important to remember that you are relying on the designations to distribute your assets, so the designations need to be up-to-date. Take caution when planning to transfer assets at death by beneficiary designation, however, when your intended beneficiaries are minor children, financially irresponsible adult beneficiaries, or beneficiaries with special needs.
You may also be interested in a will because they are easy to understand and quick to implement. A will is a set of instructions for what will happen at your death. Because you retain ownership of your assets even after the will is signed, there is no additional paperwork needed to implement your plan (with the possible exception of updating beneficiary designations if changes need to be made).
Lastly, depending on your goals and circumstances, probate may not be so bad. If you believe that there will be fighting among family members, going through probate allows a third party (the judge) to oversee the proceedings and make sure that everyone is on their best behavior. If you are worried that your family will be too lazy to manage things on their own, probate can provide the required structure, timelines, and oversight to ensure that all the required tasks are completed on time.
Express Your Will with Help from an Estate Planning Attorney
When you sit down to create a will, you are participating in a legal tradition that dates back millennia. Failure to express your will and final wishes in a legal document may leave your loved ones without the future you intended for them. To help create a plan that brings your legacy into greater focus, please reach out and schedule a meeting.
