MODULE 6

A will is a legal document that sets forth your wishes regarding the distribution of your property
and the care of any minor children. If you die without a will, those wishes may not be carried
out. Further, your heirs may end up spending additional time, money, and emotional energy to
settle your affairs after you're gone.

Wills can vary in their effectiveness, depending on the type, though no document will likely
resolve every issue that arises after your death. Here's what you need to know about these vital
documents.

KEY TAKEAWAYS

 A will is a legal document that spells out your wishes regarding the care of your children,
as well as the distribution of your assets after your death.
 Failure to prepare a will typically leaves decisions about your estate in the hands of
judges or state officials and may also cause family strife.
 You can prepare a valid will yourself, but you should have the document witnessed to
decrease the likelihood of successful challenges later.
 To be completely sure everything is in order, consider having your will prepared by a
trusts and estates attorney.
Why You Should Have a Will
Some people think that only the very wealthy or those with complicated assets need wills.
However, there are many good reasons to have a will.

 You can be clear about who gets your assets. You can decide who gets what and how
much.
 You can keep your assets out of the hands of people you don't want to have them (like an
estranged relative).
 You can identify who should care for your children. Without a will, the courts will
decide.
 Your heirs will have a faster and easier time getting access to your assets.
  You can plan to save your estate money on taxes. You can also give gifts and charitable
donations, which can help offset the estate tax.

A Written, Witnessed Will Is Best

To maximize the likelihood that your wishes will be carried out, create what's known as
a testamentary will. This is the most familiar type of will; you prepare the document and then
sign it in witnesses' presence. It's arguably the best insurance against successful challenges to
your wishes by family members or business associates after you die. You can write one yourself
but have it prepared by a trusts and estates attorney for greater insurance.

Other Types of Inheritance Wills

While a testamentary will is likely your best bet, several other types of wills get varying degrees
of recognition.

Holographic wills
Wills written and signed by the testator but not witnessed are known as holographic wills—from
the less common secondary meaning of the word holograph, meaning a document hand-written
by its author. Such wills are often used when time is short and witnesses are unavailable, for
example, when the testator is trapped in a life-threatening accident.

Holographic wills are not recognized in some states, however. In states that permit the
documents, the will must meet minimal requirements, such as proof that the testator wrote it and
had the mental capacity to do so. Even then, the absence of witnesses often leads to challenges to
the will's validity.

Oral wills
Least widely recognized are oral wills, in which the testator speaks their wishes before witnesses.
Lacking a written record, or at least one prepared by the testator, courts do not widely recognize
oral wills.

Pour-over wills
Another type of will, a pour-over will, is used in conjunction with creating a trust into which
your assets flow. (See "Wills and Trusts" below.)
Mutual wills
A married or committed couple usually executes this type of will. After one party dies, the
remaining party is bound by the terms of the mutual will.

Mutual wills can be used to ensure that property passes to the deceased’s children rather than to a
new spouse. Because of state differences in contract law, a mutual will should be established
with a legal professional's help. Though the terms sound similar, a mutual will should not be
confused with a joint will.

What Does a Will Cover?

A will allows you to direct how your belongings—such as bank balances, property, or prized
possessions—should be distributed. If you have a business or investments, your will can specify
who will receive those assets and when.

A will also allows you to direct assets to a charity (or charities) of your choice. Similarly, if you
wish to leave assets to an institution or an organization, a will can assure that your wishes are
carried out.

While wills generally address the bulk of your assets, some aren't covered by their instructions.
Those omissions include payouts from the testator's life insurance policy. Since the policy has
specified beneficiaries, those individuals will receive the proceeds. The same will likely apply
for any investment accounts that are designated as "transfer on death."

There's a key exception: If the beneficiaries of those assets predeceased the testator, the policy or
account then reverts to the estate and is distributed according to the terms of a will or, failing
that, by a probate court—a part of the judicial system that primarily handles wills, estates, and
related matters.

Most states have elective-share or community property laws that prevent people from
disinheriting their spouses.1 If a will assigns a smaller proportion of such assets to the surviving
spouse than state law specifies, which is typically between 30% and 50%, a court may override
the will.
In addition to directing your assets, a will states your preferences for who should take over as
guardian for your minor children in the event of your death.

Wills and Trusts

A will is also helpful even if you have a trust—a legal mechanism that lets you put conditions on
how your assets are distributed after you die and, often, to minimize gift and estate taxes. That's
because most trusts deal only with specific assets, such as life insurance or a piece of property,
rather than the sum total of your holdings.

You might also consider setting up a trust as a way to provide for a beneficiary who is underage.
Once the beneficiary is deemed capable of managing their assets, they will receive possession of
the trust.

Even if you have what's known as a revocable living trust into which you can put the bulk of
your assets, you still need what's known as a pour-over will. In addition to letting you name a
guardian for your children, a pour-over will ensure that all the assets you intended to put into the
trust are put there, even if you fail to retitle some of them before your death.

Any assets that are not retitled in the name of the trust are considered subject to probate. As a
result, if you haven't specified in a will who should get those assets, a court may decide to
distribute them to heirs whom you may not have chosen.

If a will leaves less to a spouse than state law requires, that part of the document may be
overridden, and the spouse awarded the mandated amount.

What Happens if I Don't Have a Will?

If you die intestate—that is, without a will—the state oversees the dispensation of your assets,
which it will typically distribute according to a set formula.

Because of the elective-share and community property provisions mentioned above, the formula
often results in half of your estate going to your spouse and the other half going to your children.
Such a scenario sometimes results in the sale of the family home or other assets, which can
negatively affect a surviving spouse who may have counted on the bulk of your assets to
maintain their standard of living.

Further complications may ensue if your children are minors, as the court will appoint a
representative to look after their interests.

Dying intestate may have tax consequences, too, since a properly prepared will can reduce the
estate tax liability. As of 2021, a U.S. estate tax return must be filed on individual estates valued
at $11,700,000 or more.2 No federal estate tax is due if the estate is worth less than that amount.

Getting Started on Your Will

To prepare a will, begin by compiling a list of your assets and debts. Be sure to include the
contents of safe deposit boxes, family heirlooms, and other assets that you wish to transfer to a
particular person or entity.

If you wish to leave particular personal property to specific heirs, begin a list of those allocations
for eventual inclusion in your will. Besides, you can identify the recipients of specific assets in a
separate document called a letter of instruction, kept with the will. However, if you include
assignments only within this letter, check that the document is legally binding where you live;
some states do not recognize them.

The letter of instruction can be written more informally than the will. It can also include specifics
that will help your executor settle your estate, including account numbers, passwords, and even
burial instructions. Other addenda to the will, such as power of attorney, a medical directive, or
a living will, can direct the court on handling matters if a person becomes physically or mentally
incapacitated.

If both you and your spouse lack wills, you might be tempted to prepare a single document that
covers you both. Resist the temptation. Estate planners almost universally advise against joint
wills, and some states don't even recognize them. Separate wills make more sense, even if your
will and that of your spouse may end up looking remarkably similar. (As noted above, a joint
will is not to be confused with a mutual will.)
How to Prepare and Validate Your Will
You don't necessarily need professional help to prepare a valid will. If you are comfortable
taking care of the task on your own, several software programs are available to assist you, as are
various DIY websites. Once you've drafted the document, it needs to be witnessed, usually by
two adults of sound mind who know you well.

Any person may act as a witness to your will, but it's best to pick what's known as a disinterested
witness—someone who isn't a beneficiary and has no financial or personal stake in your choices.
Some states require two or more witnesses. If a lawyer prepared the will, they shouldn't serve as
one of the witnesses.

In some states, a will must also be notarized, so check the rules where you live. Even if that
formality isn't required, you might consider having your witnesses complete what's known as
a self-proving affidavit. Signed in the presence of a notary, the document may facilitate the
probate process by reducing the likelihood witnesses will be called into court to validate their
signatures and the will's authenticity.

Choosing an Executor for Your Will

You'll need to name a still-living person as the executor of the estate. That person, often a
spouse, adult child, or another trusted friend or relative, is responsible for administering the
estate. You can also name joint executors, such as your spouse or partner and your attorney.

The probate court usually supervises the executor to ensure that they carry out the wishes
specified in the will. If your affairs are complicated, it might make more sense to name an
attorney or someone with legal and financial expertise.

The case for engaging an attorney is strong if your estate is substantial (ranging in the millions of
dollars) or your situation is legally complex. If so, be sure to work with someone who is familiar
with your state's laws and has extensive experience with writing wills. Your state bar association
may be able to help you locate a suitable attorney.
One of the most important things your will can do is empower your executor to pay your
bills and deal with debt collectors. Ensure the wording of the will allows for this and gives your
executor leeway to take care of any related issues that aren't explicitly outlined in your will.

Where to Keep a Will

A probate court usually requires access to your original will before it can process your estate. It's
crucial, then, to keep the document where it is safe and yet accessible. Avoid storing it in a bank
safety deposit box or in any other location where your family may need a court order to gain
access. A waterproof and fireproof safe in your house is a good alternative.

Then let at least your executor know where the original will is stored, along with needed
information such as the password for the safe. Besides, it's wise to duplicate signed copies to the
executor and your attorney if you have one. The signed copies can be used to establish your
intentions in case the original is destroyed or lost. However, the absence of an original will can
complicate matters, and without it, there's no guarantee that your estate will be settled as you'd
hoped. So store the document with care.

How to Change a Will

Your will may never need to be updated. Or, you may choose to update it regularly. Remember,
the only version of your will that matters is the most current valid one in existence at the time of
your death.

A good rule of thumb: Review your will every two or three years and at pivotal moments in your
life. Such events might include marriage, divorce, or the birth of a child. Your kids probably
won't need guardians named in a will after they're adults, for example.

Changing your will is easy. You write a new will to replace the old one or make an addition
using an amendment known as a codicil. Because of the serious nature of codicils and their
power to change the entire will, two witnesses are usually required to sign when a codicil is
added, much like when the original will was created. Some states, however, have loosened the
legal regulations surrounding codicils and now allow for them to be notarized at a public notary.
Ideally, you want to make any changes when you are of sound mind and in good health. This
limits the likelihood that your wishes can be successfully challenged and avoids decisions made
in haste or under intense emotional pressure.

Below is the sample Will format:

I, Shri/Smt ………………….. son/daughter/wife of Shri ……………..,resident of

…………………., by religion………….., do hereby revoke all my previous Wills (or) Codicils
and declare that this is my last Will, which I make on this …….(Date)………………… My Date
of Birth is ………….

I declare that I am in good health and possess a sound mind. This Will is made by me without
any persuasion or coercion and out of my own independent decision only.

I appoint Shri………………….. Son/daughter of ……………, resident of …………. to be the

executor of this Will. In the event Shri…………… were to predecease me, then
Shri……………., will be the executor of this Will.

I bequeath the following assets to my Wife Smt……………..

1. My house located at………(address)………

2. Bank balance of my savings account no…………………..with ……………(bank name &

bank address)………

3. My Bank fixed deposits in …….(bank name)…..bearing ……..(FD receipt nos)……..

4. The proceeds of my Term insurance policy ….(Policy no)……, from…….(insurance company

name)………

5. The contents of bank locker no………, with bank…………, bank address……………

I bequeath the following assets to my son Shri……………

1. Residential Plot no…….., located at…………….

2. My car with registration no……….

3. My mutual fund investments with folio numbers…………………..

4. Any other asset not mentioned in this Will but of which I am the owner.

All the above assets are owned by me. No one else has rights on these properties.

Signature of Testator

Witnesses

We hereby attest that this Will has been signed by Shri………….as his last Will at ………
(Place)……… in the joint presence of himself and us. The testator is in sound mind and made
this Will without any coercion.

Signature of Witness (1) Signature of Witness (2)