1. What property can be gifted under a Will?
(a) Generally
Those assets that you own, have control of or have a beneficial interest
in.
Personal Property
(cars, jewellery, stocks, bank accounts, etc.)
Real Estate.
You cannot
gift property that you own if it is owned in joint
tenancy as this type of property vests in the surviving joint tenant
on your death irrespective of what your Will may say.
You will not
be able to gift property that you have promised contractually (e.g., spousal
agreements or shareholders agreements).
(b) Special Property
Rules for Married Persons
- In a Community
Property state, your spouse automatically owns ½ of what either of you earned
during marriage and all property acquired with those earnings. Similarly,
all debts incurred during marriage are debts of the couple. On the death
of one spouse, one-half of the community property will go to the surviving
spouse.
- You can do
what you want in your Will in respect to your half of the Community Property
and your Separate Property (i.e., property inherited by you or owned by
you before marriage).
- Prior to completing
a Will on this website, AmericaWills.com recommends that you determine whether
you are in a Community Property State and, if so, that you obtain legal
advice in respect to your Community Property and your Separate Property.
2. The formal requirements of a Will
Must be in
writing.
Must be signed
at its end by the Testator.
Testator's
signature must be made by him or her in the presence of 2 or more witnesses
that are both present at the same time.(in Vermont, 3 witnesses are needed)
The 2 or more
witnesses must sign the Will (as witnesses) in the presence of the Testator.
The Testator
must be of the Age of Majority in his or
her State.
If a witness
is a beneficiary under the Will or a spouse of a beneficiary, any gift in
favour of such beneficiary may fail.
3. How to revoke a Will?
(a) Marriage
- In certain
States, the marriage of a Testator after signing a Will revokes the Will
unless there is a clause in the Will specifying that the Will was made "in
contemplation of my marriage to (Mary Smith)".
- In other States,
the Will is not revoked by a subsequent marriage unless a child is born
to the married couple.
- In some States,
a Will is unaffected by subsequent marriage.
- In some States,
although subsequent marriage may not revoke the Will, the surviving Spouse
will take a share of the Estate as if you died intestate.
(b) Divorce
- In some States,
Divorce may invalidate certain provisions within a Will that are made in
favor of a Testator's spouse unless a contrary intention appears in the
Will.
- In some States,
Divorce voids all provisions in a Will related to the spouse.
(c) A Valid Later
Will.
(d) The Destruction
of the Will by the Testator
C4. How to change a Will?
Make a new
Will.
Sign a
Codicil [a document that is signed like a Will but
only alters certain provisions (click
here for sample wording)].
5. What can affect the validity of a Will?
:
The Testator
must have knowledge of the assets to be disposed of in the Will.
The Testator,
by his or her Will, must intend to dispose of his or her property effective
on his or her death.
The Testator
must know what is contemplated in the Will and must desire those results
(if the Testator lacks this intention the Will may be declared invalid).
The Testator
must appreciate the consequences that will result from the contents of the
Will.
The Testator
must appreciate the claims to the Estate that may result due to the contents
of the Will.
The Testator
must be making the Will voluntarily.
The Testator's
intention must be genuine-if a provision in a Will is found by a Court to
be due to force, fraud, fear or undue influence
by another person, the Will may be declared invalid.
The Testator
must have Mental Capacity and be free of
mental disorder.
If your Mental
Capacity is in doubt, it may help to have your Doctor witness you signing
the Will-alternatively, you may wish to obtain a written opinion from your
Doctor that, in his or her opinion, you have the Capacity to sign a Will
(this may require a mental status examination).
If there are
circumstances that a Court may consider "Suspicious",
this may result in the Court concluding that the Testator lacked Capacity.
If you sign
a Will and then get married, some States deem your Will to be revoked.
If you sign
a Will and then get divorced, some States deem any provisions related to
your spouse as void.
6. The Executor/Trustee
Duties and Responsibilities
- This person
takes charge upon the death of the Testator.
- They are responsible
for your burial.
- They must
Probate the Will with the Court.
- They must determine
and gather up all the assets of the Estate.
- They must determine
and pay the debts of the Estate.
- They must pay
out the gifts you intended under the Will.
Who to Choose
- Someone you
trust.
- Someone that
generally shares your views.
- Someone who
will feel responsible to fulfill your wishes.
- Someone that
has the ability to deal with the many duties and responsibilities of an
Executor.
- Usually it
will be a spouse, your children, or friends.
- If the Estate
is complicated (or the nature of the assets requires special expertise),
you may wish to have professional executors (Lawyer, Chartered Accountant)
or in some cases a corporate Trustee such as a Trust Company.
7. Guardians (who to choose)
Generally,
a parent can appoint a Guardian for their infant children.
Identify this
person (or, if you wish to appoint a husband and wife, these persons) in
your Will.
In the absence
of such an appointment, the Court will be required to consider who should
be appointed; a Court Application will expose your Estate to significant
legal expenses.
The Guardian
should share as much in common with you as possible.
- would
they make the same decisions about your children as you would, if
you were alive?
- would
they be as dedicated to your children as you would have been?
- if they
have their own children, can they treat your children on an equal
footing?
- will
they spend your children's inheritance in a manner consistent with
your wishes?
- do they
live in your community or will the children be removed from all their
friends and community activities?
- do they
share your religious beliefs (if this is important to you)
- do you
trust them?
- do your
children like them?
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8. How to give?
I Personal Effects & Articles
(a)
Specific Bequests
- Where you wish
to leave an intended recipient a valuable article or piece of your personal
property, the preferable course of action would be for you to leave a specific
bequest in your Will to that effect (e.g., your antique General Electric
radio to your friend, John…).
- It is important
that you provide as much description of the specific article as possible
to avoid uncertainty. For example, if you have many rings, don’t state “my
nice ring to my sister…” as what is “nice” may be disputed. It would be
preferable to state “my diamond ring to my sister…and my opal ring to my
friend…”.
- It is also
important to remember that if you dispose of the specific article during
your lifetime the gift to the intended recipient fails.
II Cash
- In addition
to a Memoranda or Specific Bequests, you may choose to make certain gifts
in the form of cash.
- It is important
to note that if your Will is completed many years in advance of your death,
the value of the cash gift may decrease due to the cost of living and inflation.
In other words, the purchasing power of $1.00 today, will likely be very
different (i.e., much lower) 20 years from now.
- Also, remember
that the greater the amount of your cash gifts, the less that you can give
by way of a gift of the residue.
III Residue or Remainder of Estate
- The Residue
of an Estate is what remains after: payment of all expenses and liabilities
of the Estate; payment of all specific cash bequests; and the delivery of
any personal articles that were the subject of specific bequests (or included
in a Memoranda of Articles).
- It must be
remembered that all expenses to the Estate must be paid (including any taxes
owed by the Estate) before the intended recipients of the residue are entitled
to the gift of the residue.
- Therefore,
it is important that you calculate the value of your Estate and then factor
in the specific gifts of cash and articles and the debts, liabilities and
expenses of the Estate. Then you will have a fair expectation of the amount
of the gift that is available for you to give by way of a gift of the residue.
9. What claims can be made against your estate?
Claims
by Spouses
- Most States
do not permit you to disinherit your spouse. In Community Property
States, 1/2 of all property is deemed to be owned by each spouse.
In other States, spouses are given the right to claim a portion of the deceased
spouse's estate, irrespective of the terms of the Will (this "statutory
elective share" is a percentage that varies from State to State).
- In certain
States, a spouse can also claim Homestead Rights, whereby a spouse claims
entitlement to the family home and adjacent lands.
Claims
by Children
- Some States
permit you to disinherit a child without mentioning the child in your Will.
Other States require that you specifically name a child you wish to disinherit.
- In some States,
if you omit to provide for your children in your Will, these children will
be entitled to take a share of your estate equal to that which they would
have received had you died intestate, unless the omission is shown to be
intentional. In certain States, if a child omitted from a Will can
show that the omission was due to an accident or mistake on your part in
completing your Will, the child would be entitled to take a share of your
estate equal to what they would have received if you died intestate.
- If a child
is born or adopted after you sign your Will, many States will grant that
child a share of your estate, the share being equal to what they would have
received if you died intestate.
- In certain
States, children may also be entitled to a statutory allowance (a specified
dollar amount) or the right to live in the family home.
- Some States
restrict how much you can leave to charity if you have surviving children.
Claims
by Creditors
- Contractual
obligations of the Testator or civil wrongs (torts) committed by the Testator.
10. Important Definitions of Legal Terms
-
Age of Majority - "Age at which a person
may contract (usually 18 or 19 in most States); sometimes referred to
as full age; legal age; adulthood. Age at which one may execute a valid
Will or vote.
-
Bequest - "a gift by Will of personal property…a
legacy".
-
Codicil - "a supplement or an addition to a Will;
it may explain, modify, add to, subtract from, qualify, alter, restrain
or revoke provisions in a Will. For Example :".
This is a Codicil to the last Will of me, [name],
of [address], California, which last Will is dated [date of Will]
and is referred to in this Codicil as “my Will”.
1. [insert desired changes]
2. In all other respects I confirm my Will.
Signed by [name] as a Codicil to [his/her] Will on [month,
day, year]
(a Codicil must be properly completed and signed like a Will; 2 witnesses,
etc.)
-
"Dependant's Relief
Legislation" - In most States there is legislation (the name
of the legislation may vary from State to State) that permits a child
(definition of a 'child' may include all biological or adopted children
as well as any child that is neither your biological nor adopted child but
is treated by you as though he or she is your child) or spouse (definition
could include a common law spouse of the same or opposite sex) and sometimes
parents, grand-parents and brothers and sisters to apply to Court for maintenance
and support where reasonable support for maintenance has not been made in
the Will. If the Court concludes that, based on a number of different considerations,
there has not been adequate maintenance, it will vary the Will and order
a lump sum or periodic payment out of the Estate. In some States the
considerations viewed by the Court include the following: the moral obligation
of the Testator; the intentions of the Testator, the size of the Estate,
the financial, mental and physical circumstances of the claimant.
-
Executor Remuneration - In most
States, legislation prescribes the remuneration in the form of a fair
and reasonable allowance based on the assets of the Estate for his or her
care, the pains and trouble and the time spent.
-
Intestate - "a person is said to die intestate
when he or she dies without making a Will, or dies without leaving anything
to testify what his or her wishes were with respect to the disposal of his
or her property after his or her death".
- Intestate
Succession - "a succession is called "intestate" when the deceased has
left no Will, or when his or her Will has been revoked or annulled as irregular".
-
Intestate Successors - These persons
are deemed by each State's legislation, as the persons upon whom an intestate's
Estate will devolve (be distributed) and the amount that these persons will
receive.
-
Issue - "includes all lineal descendants of the
ancestor."
-
Joint Tenancy - "the ownership of land in
common by several persons where there is a right of survivorship; i.e.,
where on the death of one joint owner the land as a whole vests in the survivors,
and can only be disposed of Will by the last surviving owner."
-
Mental Capacity - "contemplates the ability
to understand the nature and effect of the act in which a person is engaged
and the business he is transacting…such a measure of intelligence, understanding,
memory, and judgment (relative to the particular transaction) as Will enable
the person to understand the nature of the act."
-
Probate - An Order granted by a Judge of the Court
to the effect that a Will of a certain person has been proved and registered
in Court and that administration of the Estate has been granted to an Executor/Trustee
proving the Will, the Executor/Trustee having first sworn to administer
the assets of the Estate and having completed an inventory of the Estate
and agreeing to account for the Estate assets when called upon.
-
Residue - The amount of an Estate that remains
after all charges, debts, liabilities, and specific bequests have been paid
and specific gifts of articles delivered.
-
Suspicious Circumstances - Any
circumstances surrounding the signing or preparation of a Will that casts
doubt on the Testator's capacity to make a Will or touch upon a Testator's
intention relative to the Will's contents, such circumstances including:
beneficiary involvement in clandestine Will preparation, Testator's dependence
on beneficiary or isolation from "natural" beneficiaries, dramatic changes
from the provisions contained in an earlier Will and a Testator's seriously
deteriorating health.
-
Testator - "one who makes a Will".
- Trust
- "a property interest held by one person for the benefit of another person".
-
Undue Influence - "where a person makes
a disposition of property under such circumstances as to show or give rise
to the presumption that he has not been allowed to exercise a free and deliberate
judgment on the matter".
- Will -
"the legal expression or declaration of a person's mind or wishes as to
the disposition of his property, to be performed or to take effect after
his death".
11. Examples and Illustrations
Intestate
Succession
If
the deceased has a spouse but no other descendants the spouse would
receive the entire estate.
If the deceased leaves a
spouse and surviving descendants, the spouse receives the intestate’s
household furnishings and:
(a) if the deceased’s
descendants are descendants of both the deceased and the spouse, the
spouse receives an entitlement of $300,000;
(b) if the
deceased’s descendants are not common to the deceased and the
spouse, the spouse receives an entitlement of $150,000
If
the net value of a deceased’s estate is less than the spouse’s
entitlement under (a) or (b) above, the entire deceased’s estate
must be distributed to the spouse.
If the net value of
an intestate estate is the same as or greater than the spouse’s
entitlement under (a) or (b) above, the residue of the deceased’s
estate must be distributed as follows:
(i) one half to
the spouse;
(ii) one half to the intestate’s
descendants.
If the deceased had no spouse and no
descendants then the estate will be distributed to the intestate’s
parents. If there are no parents then the deceased’s estate will be
distributed to the descendants of the deceased’s parents which will
include brothers and sisters of the deceased and then to the nieces
and nephews of the deceased.
If there are no descendants
of the parents of the deceased the estate shall be distributed to the
grandparents of the deceased. If there are no grandparents, the
estate shall be distributed to the great-grandparents of the deceased
and, finally, if there are no relatives of the deceased living, the
estate shall be distributed to the government.
Joint
Tenancy : Where
spouses are the registered owner of a home "as joint tenants",
then on the death of one of the spouses, the surviving spouse is
vested with full ownership of the home irrespective of what the
deceased spouse's Will may say.
Codicil :
This
is a Codicil to the last Will of me, [name],
of [address],
which last Will is dated [date
of Will] and
is referred to in this Codicil as “my Will”.
1. [insert
desired changes]
2.
In all other respects I confirm my Will.
Signed
by [name] as
a Codicil to [his/her] Will
on [month,
day, year]
(a
Codicil must be properly completed and signed liked a Will; 2
witnesses, etc.)
12. I’ve read the Caution Zone
- This site does
not make specific provision for common law relationships or same-sex partners.
In light of recent caselaw and legislative changes, persons in a common
law or same-sex relationship should, for the purposes of completing a Will
on this site, consider themselves “Married”. If you find this unsatisfactory
or, if you have any concerns on this subject, we recommend that you not
complete a Will on this site and, instead, seek the assistance of legal
counsel in your State.
- If you are
“Married”, your spouse can make a claim under legislation in your State.
The claim can be for an equalization of assets or for adequate maintenance
and support. Basically, if the Court agrees with the spouse’s claim, the
Court will revise your Will accordingly. If you are concerned in relation
to the type of claim your spouse can make against your Estate, we would
recommend that you not complete a Will until you have obtained legal counsel
in your State.
- If, in your
Will, you are purposely not leaving a substantial portion of your Estate
to your spouse, we would recommend that you consult with legal counsel prior
to signing your Will.
- A Will completed
on this Site does not allow you to leave your Spouse less than one hundred
percent of the residue of your estate. If this is unacceptable to you, we
recommend that you obtain legal advice, prior to signing your Will.
- If you wish
to leave a Gift to a person other than your Spouse, the only way you can
do this on this Site is to give that person a Specific Bequest of a personal
article or cash. If this is unacceptable to you, we recommend that you obtain
legal counsel prior to signing your Will.
- If you intend
on separating or divorcing (or if you recently have), we would recommend
that you seek legal counsel prior to signing a Will.
- If you complete
a Will and then marry, your Will is revoked when this marriage occurs and
you should therefore complete a new Will immediately following your marriage.
- If you complete
a Will and then divorce, any gift to your spouse (or an appointment of your
spouse as your executor/trustee) may be cancelled. If you intend to have
such gift or appointment continue after the divorce, you should complete
a new Will after your divorce.
- If you intend
on either disinheriting certain of your children or providing gifts to your
children in unequal amounts, your children can make application to Court
for a greater share of your Estate. In these circumstances, we would recommend
that you obtain legal counsel prior to signing a Will.
- If you are
uncertain as to whether someone will be considered your “child” because
he or she was adopted by you, is your illegitimate biological child or is
neither your biological nor adopted child but has been treated by you as
though he or she was your child, we recommend that you obtain legal advice
in your State prior to signing a Will. A Will completed on this Site
does not allow you to leave less than one hundred percent of the residue
of your Estate to your Children.
- If you wish
to leave a Gift to a person other than one of your Children, the only way
to do this on this Site is to give that person a Specific Bequest of a personal
article or cash. If this is unacceptable to you, we recommend that you obtain
legal advice prior to signing your Will.
- If your Estate
is substantial and your infant children are the beneficiaries, you may wish
to create certain trusts. This will require that you obtain the assistance
of legal counsel in order to properly complete a Will.
- If your Estate
is substantial and your spouse is the beneficiary, you may wish to obtain
legal advice prior to signing a Will in order to consider a trust for your
spouse. This may result in certain tax advantages.
- If your Estate
is substantial, you may wish to not complete a Will until you have received
expert advice from Estate planners, tax planners and legal counsel with
a view to reducing the taxes that may be payable upon your death.
- If you are
uncertain as to whether you have the necessary mental competency to complete
a Will, we would recommend that you obtain legal advice prior to signing
a Will.
- If you feel
pressured by certain persons to complete a Will in a manner that is not
consistent with your wishes, we would recommend that you obtain legal advice
prior to signing a Will.
- If you are
not comfortable with the legal jargon or terms contained or used on this
site or if you do not fully understand any of the legal terms or instructions
contained on this site, we would recommend that you obtain legal advice
prior to signing a Will.
- If after completing
your Will on this site, you don’t fully understand all the details and contents
of your Will, we would recommend that you not sign the Will without first
obtaining legal advice.