Remember that scene in The Matrix where Morpheus offers Neo a red pill or a blue pill?
Morpheus (a Yoda-like figure) tells Neo (the Luke Skywalker of the movie, as it were) that the reality he had been living in was a lie. (I like Star Wars a lot.)
He then offers Neo two pills — one red, one blue — and tells him that if he takes the blue pill, he will wake up tomorrow and go on with life as usual. But if he takes the red pill, he will “wake up” (both literally and figuratively) and learn just how deep the rabbit hole goes.
The catch? If Neo takes the red pill, he can never go back to the way things were. You can’t close Pandora’s Box once it has been opened.
Needless to say, Neo takes the red pill and proceeds to become the Chosen One and kill robots for three movies. It’s great.
I often think of that scene when someone asks me a question about estate planning. Because that rabbit hole is pretty deep, folks. And I’m an attorney, so there’s always a chance you won’t be able to shut that Pandora’s Box.
But for you, I’ll do my best to keep things short and sweet.
In my last blog post, I talked about trusts: what they are, what they do, why you should have one. I also spent some time discussing how trusts are different than wills. So now, given that comparison, it only seems fair that I talk about wills.
What is a will?
A last will and testament is a written legal document stating what you want to happen to your estate (your “stuff”) after your death.
Here’s a shocking statistic: Only 42% of U.S. adults currently have a will or a trust. That means only 42% of U.S. adults have a say over who gets their “stuff” after they die.
A will also names an executor (a.k.a., an “administrator” or “personal representative”) who manages the probate process after your death.
That last part usually makes a few ears perk up. Yes, contrary to popular belief, a last will and testament is still subject to probate. What is probate, you ask?
Probate is the court process of validating a deceased person’s will, addressing creditors, collecting assets and income, paying estate expenses, and distributing assets to the decedent’s named beneficiaries (or, if none, to their heirs-at-law).
Even the simplest probates can take six months to a year to complete and usually cost at least $4,000. If the probate is contested or challenged by an heir, the cost can be much greater.
Every state has different requirements for a valid will, but under the “Full Faith and Credit” Clause of Article IV of the U.S. Constitution, a will that has been properly created in one state will generally be recognized in another state.
Why is it important to have a Will?
You may have told your family or friends how you want your estate to be distributed after your death. Or maybe you have left a letter of instruction stating who you want to get your “stuff.”
But unless you have a valid will (or other estate planning document), those wishes will not be legally enforceable. Consider, for example:
Do you have minor children? A will allows you to name a guardian for your kids. If you do not name a guardian, a court will decide who will raise your children.
Is there someone you want to disinherit? If you do not disinherit them properly through an estate plan, they may still inherit under the laws of your state whether or not you want to give them anything.
Is it likely that your heirs will fight over your estate? You may want to consider naming a neutral third party to serve as executor of your estate.
These are just a few good reasons to have a will. Although a will is subject to probate at your death, it is still an important estate planning document that everyone should have. Without it, the law decides who will receive your assets — you won’t get a say in the matter!
At the very least, make a will to reduce the chance your loved will have to spend time in court fighting over your “stuff” and interpreting your “wishes.”
Can I make my own will?
This is called a “holographic” will, and we actually wrote a blog post about it.
To make a long story short, yes, you can make your own will. However, a holographic will must satisfy strict statutory requirements to be admitted to probate in Oklahoma. These requirements also bring up a lot of questions. For instance:
What if part of the document is typed, while the rest is handwritten?
What if some of the will was written on one date, and then the rest of the will was written on another date?
Where does the signature have to be located on the document?
Where does the date have to be located?
How should you describe your assets and beneficiaries?
Do the pages need to be stapled or clipped together?
A mistake in any one of these areas could invalidate the will, in which case the law decides what happens to your “stuff.”
There are other, more practical problems with a handwritten will. A court may misinterpret part of your will and distribute assets in a way you did not intend. Heirs may interpret the will differently and spend thousands of dollars fighting over it.
And if your heirs are all deceased, your estate may even end up being taken by the state.
Talk with an attorney about a will or trust.
Everyone should have a last will and testament, if for no other reason than it forces you to decide how you want your estate distributed. However, to keep your heirs from having to endure the expensive and time-consuming probate process, you should consider a living trust or other probate-avoidance techniques.
To learn more about last wills and testament or other estate planning documents, contact the experienced Oklahoma City estate planning attorneys at Postic & Bates for a free, no-obligation consultation appointment.
David M. Postic is an associate attorney at Postic & Bates, P.C. His practice includes estate planning, probate, real estate, adoption, business law, and litigation.
You can email David through our Contact Us page or by calling our office at (405) 691-5080.
[As with all our posts, the contents of this article do not constitute legal advice and are subject to our site-wide disclaimer.]