Monday, November 14, 2011

The Last Will and Testament: What, when and why?

I can't tell you how many times a client of mine has told me that they need to get their Will done soon because they are "getting older."  I can tell you that the vast majority of them are over the age of fifty with children out of high school.  And while it is never too late to consider executing your Will, waiting until your kids are over 18 and you are retired may be too late.  This article will touch upon what a Will is, what it entails, when you should execute one and why.

What is a Will?

A Will is a document by which a person (often called the "testator" or "testatrix") indicates their final wishes with respect to the distribution of his or her assets.  It is a document that provides for the payment of your last expenses, the distribution of your property after your death and the appointment of a person (in Maine the "personal representative," but often times called the "executor" or "executrix") to oversee the administration of your estate after your death.

Why do I need a Will?

There are a number of reasons that you should draft a Will:

1.)  Primary among them is that you can dictate who receives your property after your death and who your personal representative will be.   In Maine, if you do not leave behind a validly executed Will, the laws dictate how your property is to be distributed and who will be named personal representative.  Often times, this may result in your property passing to relatives that you had no intention of leaving property to (e.g. estranged children, spouses, siblings, etc.).  In Maine, there is a priority of relatives who would take your property if you do not leave a Will behind (See Title 18-A M.R.S.A. Sections 2-102 and 2-103).  It is not guaranteed that your spouse will receive ALL of your property if you do not leave a Will behind.  If you do leave a Will, you are the one to decide who will receive your assets and who will take care of your financial affairs when you pass away.

2.)  As alluded to earlier, if you have a Will, you will name your personal representatives. More than likely, you will name several alternates also.  Again, the personal representative is the person who handles your affairs after you pass away.  They are responsible for collecting and inventorying your assets, paying your final expenses, settling your final tax obligations and arranges for distribution of your estate pursuant to your wishes.  Married individuals will most frequently name their spouse as their primary personal representative and then name 1-3 other family members to be alternates if the spouse is unable to serve (e.g. children, siblings, friends, etc.).

3.)  For those who have taxable estates (in Maine, the tax exemption is $1 million for each individual and $2 million for spouses), your Will can be used to take advantage of estate tax planning and lessen the estate tax impact.  For example, you can use charitable giving, credit shelter trusts, marital deduction gifts to alleviate the estate tax burden.  Your Will can dictate how to administer property, including estate and income tax elections.

4.)  Many individuals will need nothing more than a "simple will" (e.g. everything to your surviving spouse and then to your children in equal shares).  However, it is not uncommon to have other complexities based upon your specific family circumstances.  A Will can provide helpful ways to plan for those that have minor children or disabled family members that they would like to benefit.  In fact, it may be to the detriment of disabled family members to inherit part of your estate because it results in their ineligibility for public benefits (e.g. supplemental security income, MaineCare, etc.).  Most importantly, if you want to leave part of your estate to minors or disabled individuals, you can name an individual (commonly called a "trustee") to manage those assets for those individuals.

5.)  If you have minor children, you may want to nominate the individuals who would take over as "guardian(s)" in the event that both you and your spouse pass away prior to your child becoming 18.  In your Will, you can nominate the individuals that you want to take care of your children in that situation.  If you do not leave behind a Will, it will be at the discretion of a Judge to determine who is best fit to care for your children (e.g. your parents, siblings, the State, etc.).

6.)  If you have children or other family members that you wish to keep from inheriting any part of your estate, you should draft a Will.  For example, if one of your children has estranged themselves from you, and you do not want them to receive any part of your estate, you must have a Will to do so.  Otherwise, they will most likely inherit an equal part of your estate.

Why can't I just write my own Will or print one off the internet?

This is a common question for estate planning attorneys.  However, it is a very easy one to answer.  You CAN write your own Will.  Maine recognizes almost any written document stating your intentions upon your death (often times called "holographic wills").  Normally, a Will should be signed by at least two witnesses and notarized or acknowledge by an attorney.  However, in Maine, a handwritten or typed Will signed by the testator are treated equally to witnesses/notarized Wills and need only meet minimal requirements to be probated.  HOWEVER, it's not that simple.

Your holographic Will may still be found unacceptable to the Probate Court and is much more susceptible to a Will contest than a Will prepared and executed by an attorney with witnesses and a notary.  There is a much stronger presumption that a Will executed in front of witnesses and a notary or attorney is validly executed.

Furthermore, there is no guarantee that your holographic Will is including the right language to clearly state your intentions.  As you can see from the above section on why to draft a Will, there are a large number of considerations that you may not even be thinking of.  Having an attorney guide you through the process will assist you in spotting potential problems or identifying various solutions to your family's circumstances.

Many individuals think that they will save money by preparing their own Will, but, in the long run, it may cost them thousands or more.  For example, if you leave behind a Will that has ambiguities or creates problems with your family members, they will dispute the Will in the Probate Court.  Many disputes will result in high attorneys' fees and Court costs.  These attorneys' fees and court costs will often times be paid out of your Estate and not by the people bringing the claims.  In most cases, you can have a simple Will prepared for somewhere between $150-$500 depending on the attorney drafting the document.  It is not uncommon for contested probate proceedings to cost tens of thousands of dollars.

How to Draft a Will in Maine

In Maine, any person over the age of 18 who is of "sound mind" and acting under no undue influence may execute a Will.  The "sound mind" standard means that you can identify your assets and liabilities, as well as the natural objects of your bounty.

To validly execute a Will, you must be the person signing the Will or someone can sign in your presence at your direction.  As previously indicated, except with holographic Wills, your Will must be signed by at least 2 persons who witnessed your signing.  It is also highly recommended that you have your signature acknowledged by an attorney or a notary public.

Things to consider when preparing to have your Will drafted or prior to meeting with your estate planning attorney

1.)  You should have the current names and addresses for your spouse and children, as well as any individuals or entities that you intend to benefit in your Will.  This will assist your Personal Representative in locating your beneficiaries when you pass away.

2.)  You should have a list of all your assets, the current values and where they are located.  You should also know how the accounts or assets are held (joint tenancy with rights of surviviorship, tenants in common, etc.) and who your named beneficiaries or PODs (payable on death) are.  It is important to know that if you have a joint tenant or beneficiaries named, these assets will pass automatically even if your Will says something differently.  These are commonly called non-probate assets.

3.)  You should consider whether you want to make any gifts to specific individuals or entities (e.g. friends, family members, charitable organizations, academic institutions, etc.).

4.)  You should consider how you want your assets to pass, both when your spouse passes away and after both of you have passed away.  Most commonly, married couples will leave property to their children equally.  However, you may intend to benefit children differently or may be children from different marriages to consider.  You should consider whether any of your beneficiaries' shares require special treatment (e.g. disabled individuals, individuals with financial difficulties, minors, etc.).  It is important to note that every family is different and each requires independent evaluation.

5.)  You should consider the individuals that you want to name to various fiduciary roles.  In particular, you will want to consider who to name as your personal representatives, trustees and guardians for any minor children.

When should I execute my Will?

You really shouldn't wait.  Wills are for everyone and not necessarily just those that are married or have children.  I would highly recommend to anyone that they should make an appointment with an estate planning attorney as soon as possible to discuss the various options.

In conclusion...

Drafting a Will is not as easy as one would think.  In a highly litigious society, it is becoming increasingly important that Wills be carefully drafted and executed.  A well drafted and thought out Will could save your family the money and, most importantly, the conflict that often results from poorly drafted Wills or no Wills at all.

If you need assistance in preparing your Last Will and Testament, please do not hesitate to contact me and make an appointment.  My phone number is 207-743-6351 and my email address is

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