What is a Will, and How Does it Work?
A Will, sometimes called a Last Will and Testament, is a document that directs what happens to a person’s possessions after they die. A person who makes a Will is called a “Testator.” A Will names one or more people to serve as the executor of the Testator’s estate, and instructs the executor how to distribute the Testator’s assets. For a Testator with children under the age of 18, it is also important to name a guardian to care for the Testator’s children in the event the Testator dies unexpectedly. A Will generally can be revoked or modified up until the Testator dies or becomes mentally incapacitated.
Although the law allows a large amount of flexibility when drafting a Will, there are certain formal requirements for a Will to be considered valid. For example, a Will must be signed at its end by the Testator and two witnesses. The Testator must have mental capacity to make the Will. Having an invalid Will that cannot be admitted to probate is like dying without a Will. Probate is the process in which a Will is accepted as being valid, and is a way for the probate court to ensure an estate is properly administered by the executor. This process, although it can be inconvenient, is sometimes important to protect heirs and executors from claims made against the estate, and can be a fairly simple process in Pennsylvania if there is a good estate plan in place.
Many people believe that whatever is directed in a Will is to be carried out exactly as written, but Wills have some limitations when it comes to controlling the distribution of a Testator’s assets. For example, a Will can only direct who gets assets that go through the probate process. Examples of assets that typically do not go through the probate process include the following:
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Real estate that is held in joint tenancy with a right of survivorship (with anyone), or as tenants by the entirety (with a spouse).
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Assets that have a valid “payable on death” or “transfer on death” designation.
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Financial accounts such as IRAs, 401(k)s, or life insurance policies, that have a valid beneficiary designation.
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All or a portion of jointly-owned bank accounts.
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Property held in a revocable living trust.
This means that if a Will tries to direct that an asset from the list above be given to a certain person, that attempted gift will likely fail because the asset does not go through the probate process. In other words, a person can talk about where they want an asset to go in their Will for a whole page, but if it is an asset that does not go through probate, it does no good and cannot be carried out as they wish. For example, consider a married man who owns a rental property jointly with his brother, with a right of survivorship (meaning the property will avoid the probate process and go directly to the co-owner). If the man dies first, his brother will automatically own the whole property, even if the man’s Will directed that his share of the rental property should go to his wife.
Or, consider the example of an elderly widow who owns one major asset, an IRA account worth $250,000. If she lists her five adult children as equal heirs in her Will, but names only her oldest son as the beneficiary on her IRA paperwork, the oldest son will get everything because IRA accounts with valid beneficiary designations avoid probate. The other four children will only get what the oldest son voluntarily decides to share. This is obviously not the intended outcome, but it is a mistake that is easy to make. We want to help you avoid such pitfalls.
Having a qualified estate planning attorney prepare your Will is one way to ensure that all the formal requirements for a valid Will are met, and that your asset distribution plan is coordinated between your probate estate and any non-probate assets you might own. If you would like to hire us to prepare your Will, we would be honored to serve you!