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Some Frequently Asked Questions about Wills

What are some common terms related to wills?
What are some of the other advanced estate planning tools and techniques?
If I have a will, do I need additional estate planning?
Can I prepare my own will without a lawyer?
If all of my property is jointly-owned with my spouse or loved ones, why do I need further estate planning?
What is the best way to handle beneficiary designations on life insurance and retirement benefits?

What are some common terms related to wills?

Intestacy. Intestacy means dying without a will or a trust. Intestacy is actually an involuntary method of estate planning because dying without a will or a trust means that you have given the state the right to decide who is to receive your property.

Last Will and Testament. A last will and testament is your direction to the probate court explaining who you want to take authority over your property and how you want your property to be distributed at death. It is also the document used to name a guardian for minor children.

Joint Tenancy with Rights of Survivorship. One of the ways to own property is as joint tenants with rights of survivorship. Bank accounts or real estate may be co-owned and co-controlled by joint tenants while you are alive and well. Your property, if titled this way, passes without probate to the surviving joint tenant at your death.

Beneficiary Designation. Life insurance benefits, annuities, individual retirement accounts, qualified retirement plans and pension plans pass to named beneficiaries at your death. Beneficiary designations override any instructions you may give for disposing of these assets in your will or living trust. Generally, these assets do not pass through probate.

Power of Attorney. A power of attorney is often used as a “disability” planning tool. Authority to control, manage, and distribute property while you are living is given in a power of attorney to another person, or “agent.” A “durable” power of attorney is in effect while you are well and remains effective even if you become incapacitated. A power of attorney is no longer valid at your death and the agent loses authority to act on your behalf when you pass away.

Gifts. Giving assets away prior to death can be a valuable part of an estate plan if it is accomplished with appropriate professional advice.

Living Trusts. You can use a living trust to manage your property while you are alive and well, provide directions to others if you become mentally disabled, and distribute your entire estate according to a comprehensive plan without the need for probate.

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What are some of the other advanced estate planning tools and techniques?>

There are many different tools, strategies, techniques and special trusts that might be part of a sophisticated estate plan. These specialized tools require a trained and experienced attorney to assure that they are properly designed and implemented. Examples of these advanced tools include irrevocable trusts, life insurance trusts, asset protections trusts, charitable trusts, LLCs and family partnerships, qualified personal residence trusts (QPRTs), and grantor retained annuity trusts (GRATs) and generation skipping dynasty trusts.

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If I have a will, do I need additional estate planning?

Wills are important tools of estate planning, and are crucial for parents who have minor children. Guardians for your minor children are named in your will. A will informs the probate court of your desires for disposition of property you own individually at the time of your death. Having a professionally prepared will is preferable to doing no planning or a do-it-yourself will. There are, however, a number of disadvantages to using a will as your primary estate planning tool. If you have a will, or want to use a will as your primary estate planning strategy, you should know that:

  • A will guarantees that your estate will be distributed through a court-administered probate proceeding.
  • A will can result in time delays before probate is complete and all inheritances are received.
  • A will can be challenged in the probate proceeding by unhappy relatives.
  • A will becomes part of the probate court files which are open to public inspection by anyone who wants to know about your affairs.
  • A will provides no planning or direction to guide your family if you become mentally incapable of handling your financial affairs.
  • If you own real estate in more than one state, multiple probates may be required if you use a will to dispose of your property.
  • A will does not control the distribution of all of your property. Life insurance proceeds, retirement benefits, and annuities pass by beneficiary designation. Jointly titled property passes to the co-owner. These types of assets do not pass according to the terms of your will. This can create problems if your will is inconsistent with your beneficiary designations and the way your bank accounts and real estate are titled.
  • A will may not be effective if you move to or own property in another state.

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Can I prepare my own will without a lawyer?

Alaska Law allows an individual to prepare a last will and testament that will be legally valid if the entire document is written out in the handwriting of the decedent. Moreover, will forms are available in stores, or on the internet, or in software packages. Any of these options might be used to prepare a legally valid will. Foley & Foley strongly advises against the preparation of wills or other estate planning documents without the help of a lawyer or competent legal advisor. We have seen many mistakes that have led to family conflict and strife when individuals have elected to save money by doing their own legal documents without professional assistance.

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If all of my property is jointly-owned with my spouse or loved ones, why do I need further estate planning?

There are a number of drawbacks to relying on jointly-owned property as your primary estate planning tool.

  • Jointly owned property can pass to unintended heirs, particularly in the event of the death of both joint tenants.
  • On the death of one spouse, all control of property passes to the surviving spouse, who might be subject to emotional influence from children or a second spouse.
  • In second marriages, assets that are jointly titled between the spouses pass to the surviving spouse and may never benefit children from the first marriage.
  • Joint tenancy does not avoid probate. The probate proceeding is merely delayed until the death of the second joint tenant.
  • Joint tenancy does not accomplish any estate tax planning.
  • Joint tenancy may lead to unanticipated gift and estate taxes when used between non-spouses or between parents and children.

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What is the best way to handle beneficiary designations on life insurance and retirement benefits?

Most people will pass substantial wealth to their loved ones in the form of life insurance, annuities and retirement plans. These assets are controlled by beneficiary designations, not by your will or your trust. Consequently, it is critical to review beneficiary designations and keep them current to assure that these assets will pass to the right people, in the right way, at the right time. Common problems with beneficiary designations include:

  • Beneficiary designation forms have been filled out incorrectly or have become outdated.
  • Multiple and contingent beneficiaries are often designated for life insurance, annuities, and retirement benefits. In naming beneficiaries, assumptions are made about who will die first. If deaths occur in an unanticipated order, assets may not pass as you intended.
  • Beneficiary designations may not take into consideration or be consistent with other estate tax planning that has been implemented.
  • When children are named as beneficiaries or contingent beneficiaries, they will receive all of the property outright at age 18. Prior to that age, a conservator will have to be appointed by the court to hold these assets for them.

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Foley, Foley & Pearson, P.C. is a full service Estate Planning law firm. We offer our clients services in Probate Administration, Estate Taxes, Wills, Trusts, Disability and Incapacity Planning, Estate Administration, Corporate and Business Law, Business Succession Planning, and Planned Giving and Charitable Bequests.