Most Americans die without a will. Even in cases involving extensive wealth I am amazed to see the difficulty people have in taking the necessary steps to implement a will. This is particularly an issue for farmers, owners and breeders of livestock and horse farms. Usually one's principal assets are tied up in the animals and land, and if you have no will there can be uncertainty as to what will happen after you die. Without a will, the continuity of your activity is something outside your control. Most people procrastinate making a will until it is too late.
Seeking legal counsel for preparing a will can often lead to fresh ideas on how to save on Federal estate taxes and how to operate the venture in accordance with IRS Regulations under the hobby loss rule. Many people do not know that their life insurance can be used as a valuable tax savings device in what is called a Life Insurance Trust. It is usually important for your lawyer to check the deeds to property to make sure everything is in order. If properties are held in joint tenancy, this is also something to check, because frequently there are errors in how these deeds are drafted, however disconcerting that may be.
If you don't have any close relatives or heirs and you die without a will or other estate plan, the State can readily inherit your property. Or, under the laws of intestacy, your property might go to distant relatives whom you never even met. A will is the best protection to insure that your estate will be handled according to your intentions.
Some people put details in their will as to how they want their farm, ranch, horse activity or other operations managed or disposed of after their death. Because the law of wills favors the requests of the deceased, you can put in a lot of detail if you wish, to "micromanage" things after your demise.
It is not recommended to draft your own will because it is a legal document and there are various elements that go into it. The slightest defect in a will can render it invalid.
Wills are usually low cost items in terms of legal fees. An alternative to a simple will is the living trust, which requires a good deal more paper work and time. Individual assets usually have to be transferred into the living trust, and a trustee must be designated to administer the trust upon one's death.
I generally draft wills in natural-sounding language. It is important to double check the will for correct names, spelling, dates, relationships and any other factual matters. Wills have to be properly signed, usually in front of two witnesses, in order to be valid.
Will contests are quite rare, but in order to avoid conflicts if, for instance, you think some family members might feud, you should discuss these issues with legal counsel. It is never advisable to "promise" anyone that you will leave them a portion of your estate, as this can lead to will contests in the event you fail to fulfill your promise.
If you have a family partnership, limited partnership a closely held corporation, or an LLC, your attorney must coordinate provisions of those entities with provisions of your will so that there is no conflict.
Who to appoint as an executor is an important decision. The executor of your will has great control over the timing of sales, of investments made during probate, and if nothing is said on how to manage your property, your executor has great discretion to decide what to do.
Most people appoint their principal heir as executor. However, many people appoint their attorney as executor because of confidence they have in their attorney's abilities. Executors have financial duties and are held to a high fiduciary standard. Being an executor can involve considerable time, and executors are allowed to be appropriately paid according to State law.
A will entitles your heirs to have court supervision over the distribution of your assets so that maximum security and oversight will be insured. The area of wealth transfer always involves hazards of human frailty, embezzlement and the like, and that's why court supervision is important – to avoid these possibilities.
As mentioned, people tend to procrastinate making a will, just as people will procrastinate going to the doctor or attending to other unpleasant duties in life. However, once you have implemented a will, a living trust or other estate plan, there is usually a sense of relief and satisfaction that you have fulfilled your legal and moral duties to your loved ones.
John Alan Cohan is a lawyer who has served the farming, ranching and horse industries since 1981. You may reach Cohan by calling 1-866-532-1960.