When I was an investment advisor, estate planning often came up with clients. The focus was on planning for the eventualities. Having an up-to-date wills, having an executor appointed, and how probate works were commonly discussed. In the planning process these topics feel more abstract because they pertain to an event that will happen in the future. When your spouse or partner has passed away, these issues become reality.
If you’ve been widowed, you may have questions about the will your loved one left behind, about the executor’s role (especially if you’re the executor), and what probate is all about. A better understanding of these key elements will be helpful. Plus, soon you’ll need to revise your own estate. Having a greater comfort level with these matters will help you make better decisions.
These topics are important and to give them proper treatment I’ll cover them in separate posts. I’ll be providing specific information on the role of executors and what probate is. But first, let’s take a look at wills.
Important Disclaimer: Estate laws vary depending on what country you live in. Within countries, individual states or provinces can have important legal differences too. What follows is for informational purposes only and is general in nature. The following material should make sense in countries that adhere to a system of common law but please consult a professional who is licensed in the applicable jurisdiction prior to making any estate plans or changes.
Where There’s a Will
Where there is a will, there is a way – for the most part, a straight forward way – to settle an estate. When someone dies without a will, their estate is considered “intestate” which is a fancy way of saying there was no will. There is a way to settle an estate without a will, but the government of the area where deceased lived gets involved.
When there’s no will, the powers that be must appoint someone to manage the distribution of assets, pay all bills and taxes, and determine what needs to be done for any dependants. The surviving spouse or a family member may be appointed as administrator, or even a third party depending on the circumstances. Whoever they appoint as the administrator/executor must follow certain procedures for distributing the assets and looking after any dependants.
The legal ramifications of not having a will can vary quite a bit depending on where you live. Regardless though, if a person dies without a will there’s a good chance their property won’t be dispersed as they intended. Their children may end up with someone they never would have chosen as a guardian. And, a spouse may not be taken care of as they’d hoped.
What is a Will?
Most people have a general idea of what a will is, but let’s cover some of the basics. A will is a legal document that outlines the distribution of your property and the care of your dependants (if any) in the event of your passing.
The most common type of will is in written form (sometimes even hand written) and is called a “self-proving” or “testamentary” will. It is signed by you and someone witnesses your signature for verification. A will that isn’t witnessed is called a “holographic will”. Holographic wills often face problems when challenged in court. If you only tell someone how you want your assets distributed, but never put it down on paper, that’s called an “oral will”. Oral wills are VERY difficult to prove in court, but in some cases they’ve held up.
The best way to make sure your wishes are carried out is to have a written will, signed, and witnessed by a couple of people who are not beneficiaries or have any other interest in your estate.
You don’t need a lawyer draw up your will. You can write it yourself. You can find software programs and websites to help you assemble your will, and you’ll save money. But I believe money spent getting a will done using a lawyer, is money well spent. I’d also suggest using a lawyer who specializes in estate law. No doubt, you’ll probably spend a bit more on a specialist. But, a good estate lawyer may be able to make specific recommendations that will be beneficial, possibly even saving the estate money when all is said and done.
Changing a will
As time goes by, chances are you’ll change your mind on a few things about your estate. You can make changes by writing a completely new will. This is a good idea if the revisions are significant or if a lot of time has passed since your last will was drafted. Smaller additions or amendments can be added to your existing will with a new written section called a codicil. A codicil can be used to add, subtract, or change provisions in a will rather than rewriting the whole thing. Again it’s best to hire a lawyer to prepare the it for you.
Choosing an Executor
When setting up a will, you must choose an executor. The executor is the person in charge of making sure the will is “executed” according to the instructions contained in it. This is a huge role and choosing your executor should not be taken lightly. Many people pick a family member or trusted friend. Some people choose more than one person so the duties can be shared. You can appoint your lawyer or a corporation that specializes in estate management, such as a trust company. There are pros and cons to the various options. In another post, I’ll outline in detail the role of the executor and what to consider when selecting yours.
When your will is prepared and your executor is chosen, you’ll want to obtain at least two signed, and witnessed copies. You should keep one in a safe place but accessible for when you want to review it. The other copy you can give to your executor or co-executors. When you use a lawyer to prepare your will, they’ll often keep a copy in their vaults for safe keeping. If you don’t give one to your executor, at least let them know where your copy is. You don’t want your executor unable to find your will.
Wills and Widows
If you’ve lost your spouse or partner, the matters of the deceased’s will (or lack of a will) are now upon you. Hopefully there is an up-to-date will and a competent executor (assuming you’re not the executor). If there was no will, you will need to find out more about what your legal rights are.
In most common law countries like Canada and the U.S., spouses have certain rights (as do children) that the government recognizes when someone dies without a will. But that doesn’t mean you’ll get entirely what you think your spouse may have intended. Complications can arise because the definition of “spouse” varies from jurisdiction to jurisdiction. The rights of common-law spouses are not always recognized, but in some cases a petition can be made to the courts for some form of settlement or support. The types of problems that can emerge are innumerable. If you’re faced with this situation and want to know where you stand, my advice to you is to get some good legal counsel and learn what exactly your rights are.
There’s a lot more to write on this topic and I will in future posts, so keep checking back for more. In my next post, I’ll discuss the role of the executor, how to chose an executor, and how to work with an executor.
