The simple will is the document that comes to mind first when most people think about estate planning. In reality, this device is really not the right choice unless the situation is very simple and straightforward.
We will provide a basic explanation of simple wills here, and we will also look at the drawbacks and limitations.
Purpose of a Will
Everyone is aware of the fact that a will can be used to state your final wishes with regard to asset transfers after you are gone. You can also use a will to nominate a guardian to care for your dependent children if it ever becomes necessary.
Any competent adult can execute a will that is legally valid. In order for a will to be valid in California, you must sign the will in front of two witnesses.
The witnesses must also sign the will at the same time as one another. This can be done when you are actually signing it, or when they witness you acknowledging your signature on the will.
There is no will notarization requirement in the state of California.
Will Revocation or Changes
You can revoke a will at any time by physically destroying it. If you want to change the terms of the will, you can destroy the existing will and create a new one. Even if it is not destroyed, you can state that all previous wills are invalid in the updated document.
Creating a new will is the way to go if there are significant changes, but if you have to make a very minor adjustment, you can add a codicil (amendment) to the existing will.
When you are drawing up a will, you name an executor to act as the administrator when the time comes. After your passing, the will is admitted to probate, and the court provides supervision during the administration process.
Creditors are notified, and they are given time to come forward seeking satisfaction. The executor will establish an estate bank account and obtain an Employer Identification Number (EIN) from the IRS. Valid final debts will be paid while the estate is being probated by the court.
Assets will be secured, identified, and inventoried, and they will be prepared for distribution. The preparation will often include appraisals and liquidation of property.
If anyone wants to challenge the validity of the will, they can come forward during probate, and there are four acceptable grounds. One of them is improper execution, so the basic signing and witnessing requirements must be met.
Another one of these grounds is testator incompetence, and cognitive impairment is relatively common among elders. A will that is executed under fraudulent circumstances would not be valid, and undue coercion is another acceptable pretext for a will challenge.
A Viable Alternative
The probate process will take close to a year in most instances if there are no major complications. No inheritances are distributed while the estate is being probated by the court, and considerable expenses accumulate while the clock is ticking.
Anyone that is interested can access probate records to find out how the resources were distributed, and this is another negative.
If you use a living trust instead of a will as your estate plan centerpiece, the trustee would be able to distribute assets outside of probate. As a result, these hassles would be avoided.
Plus, when a simple will is used, the inheritors receive lump sum bequests. This can be a source of concern if you are leaving resources to someone that may not be ready to handle a windfall.
This concern can be properly addressed if you use a living trust. It would become irrevocable after your passing, and the beneficiaries would not be able to directly access the principal. This arrangement would also apply to their creditors, so there would be asset protection.
You would have the ability to instruct the trustee to distribute limited assets incrementally to prevent reckless spending. If you choose to do so, you can allow for larger distributions when the beneficiaries reach certain age thresholds.
Take Action Today!
If you are going through life without an estate plan, action is required. We can gain an understanding of your situation and help you create a personalized plan that ideally suits your needs.
You can set the wheels in motion right now if you call us at 310-337-7696, and you can use our contact form if you would prefer to send us a message.
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