When a will won’t work


A will allows you to distribute your worldly assets, choose a guardian for minor children, and appoint an executor to carry out your wishes.

But you need to be aware of what a will can’t and shouldn’t do. This is especially true if you are writing your own document without the help of a lawyer, because you might unknowingly make a mistake that upsets your entire estate plan.

WHAT ONE WILL CANNOT DO

A will cannot avoid probate, the legal process that usually follows death. In probate matters, your will becomes a public record and the court oversees the distribution of your estate.

In many states, probate is not particularly expensive or time consuming. In other states, like California and Florida, probate can be expensive and time consuming, which is why many residents want to avoid it.

A common way of bypass homologation is to create a revocable living trust and then transfer the ownership of your real estate, accounts and other assets to the trust. You retain control, but upon your death, whoever you appoint as successor trustee can distribute your assets without court intervention, says Matt Palmer, associate product advisor at online legal site LegalZoom.

You can avoid probate by using other means. Jointly owned property passes directly to the other owner, bypassing probate. Accounts with beneficiaries, such as life insurance and retirement funds, can also avoid probate. You may be able to use “transfer on death” or “payable on death” documents to designate beneficiaries from other financial accounts. Some states have the transfer on death certificates for real estate or the transfer on death registration for vehicles.

Your will cannot replace a beneficiary designation or change who inherits jointly owned property, Palmer says. For example, if you forget to change the beneficiary of your life insurance policy from your former spouse to your current spouse, your ex will usually receive the proceeds, regardless of what your will says.

You also can’t leave property to pets with a will or other estate document, because pets are considered property, says Palmer. You can, however, use your will to designate someone to care for your pet and leave money to do so.

WHAT A WILL MUST NOT DO

You can see your willpower as a way to ultimately force people to do what you want. You could leave your nephew a bequest that he will only receive if he finally finishes his studies, if he quits smoking or if he fulfills some other condition.

But putting conditions in a will is often a bad idea, says Betsy Hannibal, senior legal writer at Nolo, a self-help legal site. Some conditions, such as requiring someone to marry, divorce, or change their religion, are not legally enforceable because they are considered to be against public order, Hannibal says.

“Such clauses would include conditional gifts that attempt to control the protected individual freedoms of beneficiaries, such as their marital status or religious beliefs, as well as gifts that would compel the beneficiary to do something illegal,” she said.

Other conditions are simply onerous. Someone needs to oversee the bequest and decide when the conditions are met, which can be difficult or time consuming, she says.

If you want to impose conditions, consider paying a lawyer to set up a trust rather than using a will. Expect to spend $ 2,000 or more, says Hannibal. You will need to appoint a trustee, who may need to be paid by the trust for its services. Additionally, when the money is in the trust, it may be subject to high tax rates. Only you can decide whether putting chains on an inheritance is worth the extra cost.

Another opportunity to use a trust is when you want to leave money to a person with special needs who is receiving government benefits. Even a relatively small bequest could disqualify them from essential benefits such as additional security income and health insurance coverage through Medicaid. Special needs trusts must be carefully drafted to be effective, so consider consulting with an experienced lawyer.

WHAT YOU DON’T WANT TO DO WITH A WILL

Technically, you can disinherit your wife or husband in your will. In fact, disinheriting a spouse can be extremely difficult to do.

“Every state has a mechanism that protects a spouse from being completely disinherited,” says Hannibal.

In communal property states, a spouse usually has a legal right to half of the property acquired during a marriage, regardless of title to the property. Community ownership states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington state, and Wisconsin. In the other, the common law states, a spouse usually has the right to claim a third to half of the estate, regardless of what a will says.

A spouse can agree to be disinherited in a prenuptial or post-nuptial agreement, or they can “renounce” or deny an inheritance so that it goes to other heirs. If your spouse is prepared to be disinherited, consult an experienced estate planning lawyer to help you draft the appropriate documents. If your spouse doesn’t agree, you can talk to the lawyer about your options, but understand that it may not be possible to disinherit them.

This column was provided to The Associated Press by the NerdWallet personal finance website. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score”.

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