Investing with Faith / Edward O. Martin

Why do you need a will? It speaks for you after you have passed

After Mass a few weeks ago, I had coffee with a friend who asked me, “Why even have a will?” It’s a common question and one that, as an estate attorney, I often get.

But it’s also a good question.

Consider the number of choices we make daily. Planning our estate, whether to ultimately benefit our family or our favorite ministry or parish, is one of the weightier decisions we face. So, I shared with him, as I’ll share with you, some practical reasons to consider creating a will.

A will is a fundamental part of any carefully considered estate plan. After we die, this document speaks for us, informing our loved ones about what we want to happen with the things we have left behind.

Specifically, a will is a legal document that identifies the new owners of your property after you die and empowers representatives to act on your behalf to execute your will. Your will governs your “probate estate,” the property transferred to the new owners under the will. (However, it is important to know that your property can be transferred by other means, too, like payable-on-death accounts and trusts.)

Before your will takes effect over your probate estate, someone—such as a family member or your executor—must prove your will’s authenticity to a judge in probate court. After successfully probating a will, it becomes a source of legal title, or proof of ownership, for the new owners.

Simply put, the owners inherit gifts from you through your probated will. Thus, your will should clearly state your intentions regarding these gifts and those who inherit them. A well-written will should minimize (and hopefully eliminate) confusion among your survivors.

Your will also identifies the person you choose as your “personal representative,” traditionally known as your “executor.” The judge appoints this person to wind up your financial and legal affairs and to execute the instructions in your will. Your representative will take possession of your probate estate and finalize your tax and economic matters.

For example, your representative might file insurance claims, prepare and file your tax returns, and/or pay your debts. When the court proceedings are concluded, your personal representative returns possession of the remaining probate estate to the new owners.

You should always carefully create your will to cooperate with the other parts of your estate plan. For example, parents with young children should make a will to nominate guardians to raise the children if they were to die. Your will informs the judge in the separate guardianship proceeding, which is concerned with the best interests of your children.

You can also create trusts within your will to benefit others, which are separate legal estates that can continue after the probate proceedings are concluded. These “testamentary” trusts are usually designed to help minors or persons with disabilities, but can also address other matters like tax objectives. Your will directs the transfer of your probate estate to these trusts, which is called “funding” a trust.

Our estate plans can have many parts, including wills, trusts,

payable-on-death accounts, and transfer-on-death property. A well-written will should speak for us when we cannot and help fit all these parts together to ensure the intentions of our overall plan are executed correctly. While your will only governs the probate estate, it can still inform the other parts of your estate plan, relieving confusion.

If you have questions about your estate plan, you should take steps to create or review your wills and consider seeking professional guidance from financial and legal advisors.
 

(Edward O. Martin is a Centerville, Ind., attorney who practices in the areas of estate planning and administration, business, and real estate. He is a member of St. Elizabeth Ann Seton Parish in Richmond and is currently serving on the archdiocesan Catholic Community Foundation’s Professional Advisor Group.) †