The Last Will and Testament
A Last Will and Testament (or, simply a “Will”) is a legal document, prepared under state law, which names those individuals and / or entities who should receive your property after your death (known as your “beneficiaries”). A decedent’s assets are generally characterized into two categories: “probate assets” and “non-probate assets.” A Will allows you, the “testator,” to leave instructions regarding how your probate assets should pass upon your death (collectively, your “probate estate”). Probate assets are all the assets that you own at your death that are subject to probate administration to effectuate a transfer of ownership. Probate assets includes assets owned individually; assets payable to your estate upon death (i.e. life insurance or retirement plans where your estate is listed as the beneficiary); and tangible personal property (i.e. automobiles, cars, household furniture and furnishings, jewelry, clothing, etc.). Non-probate assets are those assets which do not need to be included in your Will or the probate process to transfer ownership. Non-probate assets include life insurance and retirement plans with a non-estate beneficiary designation; any bank or brokerage with a payable on death (“POD”) designation; property held jointly as tenants by the entirety or with right of survivorship; and, assets titled in a trust.Who is designated to carry out the terms of a Will?
In your Will, you will appoint an Executor, also known as a Personal Representative. An Executor is charged with administering your probate estate and distributing your assets pursuant to your wishes. The Executor should be an individual and / or corporate trust company who is trustworthy and capable of handling the many duties and responsibilities of this position. Your Will allows you to instruct your Executor on how assets, including those with financial value and sentimental value, are to be handled and distributed upon your death. For example, through a Will, you can make specific bequests to individuals, organizations, universities, and / or charities, create trusts for your loved ones, appoint a guardian for minor children, etc. A Will provides directions on how debts, taxes, probate fees, and other expenses associated with the administration of your estate are to be paid. You may authorize the Executor to sell assets as may be necessary in order to pay your debts, any death taxes, and the expenses of probate. Additionally, in your Will, you will name the Trustee(s) of any trusts created under the document. A Trustee manages the trust for the benefit of the beneficiaries; makes distributions directly to, or for the benefit of, the beneficiaries; and, may also make investment decisions for the trust assets.What will happen if I haven't created a Will?
A common misconception is that, if you do not create a Will, you do not have a Will. In fact, if you die without leaving a Will (legally known as dying “intestate”), the government decides how and to whom your assets are left. If you die intestate, then all of your property and assets pass to your heirs at law. Generally, your heirs at law will be your closest living relatives. Per Tennessee intestacy laws, if you are married, then your heirs at law are your spouse and children. If you have children, your children will be heirs at law. If you are not married and do not have children, then your parents or siblings are your heirs at law. If you die intestate, the Court will appoint an Executor to handle the estate administration. If you have minor children, the Court may also appoint a guardian.
While Tennessee intestacy law may select the same heirs that you yourself would have chosen, the law does not capture the intricacies of your personal situation. For example, the law is unable to identify, as you could, which individual should receive a family heirloom or important sentimental item. The law is further unable to identify which beneficiaries should receive assets in trust, rather than outright, in order to protect them from poor financial decisions, creditors, divorce, or future lawsuits, or to provide support for their special needs. The law is not you. You are the only person who can best determine how to care for and protect your family after your death through a Will tailored to your situation.Advantages of a Last Will and Testament
In summary, several advantages of a Will may include, but are not limited to, the following:
- Avoids distribution under the law of intestacy.
- Permits the nomination of a guardian for any minor children.
- Allows choice in selecting the Executor and / or Trustee.
- May authorize specific bequests to individuals and / or entities (i.e. charities) that would not otherwise inherit under the laws of intestacy.
- May authorize the sale of assets during the probate administration.
- May authorize the continuation of a business.
- May defer distributions to minors and / or family members who need financial protection or assistance.
- Provides peace of mind.
The first step in creating a comprehensive estate plan is to contact a Tennessee estate planning attorney. You should choose an estate planning attorney who can draw up your Will and offer recommendations based on a detailed understanding of your individual circumstances and objectives. Cole Law Group would be pleased to help build a comprehensive estate plan that fulfills your wishes and best protects your loved ones.
Call a Cole Law Group estate planning attorney at 615-490-6020 today to get started!