A will is a written or oral communication by a person stating how they want their property disposed of at death. This person is known as the "testator."
Different Types of Wills
There are several different types of wills one can use to dispose of his or her estate:
- Self-proving will: A will that has been witnessed and signed with all of the formalities required by state law. This is the most common will.
- Holographic will: A will that is handwritten without the presence of witnesses. Very few states recognize these types of wills, and only in limited, specific circumstances.
- Oral will: This type of will is an unwritten disposition of property, whereby the individual orally communicates his or her wishes. Oral wills are only recognized in a few states and usually only in compelling situations.
Requirements for a Will
There are several requirements for a self-proving will:
1. Be of sound mind. This means that you must:
- Be at least 18 years old or an emancipated minor
- Know what a will is
- Know that you are making a will
- Understand your relationship between yourself and the people who care for you (i.e. immediate family members, including spouse and family)
2. Expressly state that this document is your will.
3. Sign and date the will.
4. Signed ("attested") by at least two or three witnesses: The number of required witnesses depends on state law. In addition, most states require that the witnesses not inherit anything from the will.
- The witnesses should sign the will in the testator’s physical presence
- The witnesses should sign the will at the same time
4. Have one substantive provision that:
- Appoints a guardian for any minor children
- Lists who inherits specific items
- States what happens to remaining property not specifically mentioned in the will
6. Appoint an executor
- Responsible for supervising the distribution of property
- Makes sure that all your debts and taxes are paid
Requirements for a Holographic Will
These are the requirements for a holographic will:
- Handwritten: The entire will should be handwritten. Commercial form wills are typically not valid as holographic wills because they are not completely handwritten by the testator.
- Material provisions: In the event that the entire will cannot be handwritten, the material provisions of the will should at least be handwritten. The material provisions of a holographic will are the person who is to receive the gift and the gift itself.
- Signature: The holographic will must have a handwritten signature. The signature cannot be typed. The signature need not be the testator’s legal name, but the mark on the will should be something that most people who know the testator would recognize as an alias for the testator.
What Is a Trust?
A trust is a legal property interest held by one person (trustee) for the benefit of another (beneficiary). The creator of the trust is known as the "settlor."
Different Types of Trusts
There are several different types of trusts one can create:
- Living trust: A trust that is created while you are alive. A living trust allows the trustee and beneficiary to avoid the probate process. Also known as an "inter vivos trust."
- Testamentary trust: A trust established through a will. A testamentary trust generally must go through probate.
- Revocable trust: A trust that can be terminated at any time by the grantor for any reason.
- Irrevocable trust: A trust that cannot be changed or terminated for any reason.
- Spendthrift trust: A trust which prohibits beneficiaries from accessing the trust early, but also prevents creditors from accessing the trust. Note that the trust types can overlap or transform. A living trust is generally a revocable trust. A living trust becomes irrevocable upon the settlor’s death. A spendthrift trust can be a living or a testamentary trust.
Requirements for a Trust
Creating a trust is a relatively simple process. All that you must do is:
- Declare your intent to create a trust – the declaration must be written. Oral declarations will have no effect.
- Sign over the required deeds for property such as homes and automobiles that will be included in the trust
- Include at least one living beneficiary other than yourself
Advantages of a Trust
- Property in a living trust does not go through probate
- The trust document is never made public
- You can name alternative beneficiaries to inherit property if a primary beneficiary dies before you do
- Allows others to handle your assets when you are not able to
Do I Need an Attorney to Draft a Will or Trust?
If you choose to create a will or trust, consulting with an estate planning attorney is always a wise thing to do. The potential tax implications and legal formalities of will and trust drafting make a lawyer's counsel indispensable. A lawyer can explain all your options and help you understand what types of wills or trusts are right for you and your family.