Your Will (or Last Will and Testament) is a written document controlling the disposition of your property at death. It must be written, signed, and witnessed by two competent people (or as otherwise required by the State law where you live). Your Will can be changed at any time but the formalities of execution (signing and witnessing) must always be followed. You should review and update your Will at regular intervals (every three to five years) and upon major life changes (marriages, births, deaths).
In your Will you get to say who will receive your property after you die. You may give specific items to specific people (“my stamp collection to my nephew George”), or general gifts to groups (“all of my property, in equal shares, to my children”) or any combination that you choose.
In your Will you nominate the person that you want to be in charge of your estate after your death (executor or “personal representative”) and if necessary the person that will take care of your minor children (guardian). When there is no Will the intestate formula in the law determines who receives the decedent’s property. These rules are inflexible and do not allow for any special circumstances.
Estate Taxes are based on the taxable value of the estate. The tax is paid by the Estate before the heirs receive their shares. Many items are included in your taxable estate even though they don’t pass by your Will. Federal law allows a certain amount to pass without any tax. This amount changes based on the current Federal Law, but most people, who have less than the exemption amount, will not have to worry about the Estate Tax. Federal law allows an unlimited amount to pass tax-free to a spouse, so most married couples do not have to worry about Estate Tax until the second one dies. However, proper planning can reduce or even eliminate Estate Taxes on many larger estates. If you have significant assets, you should see an Estate Planning Attorney to ensure you have properly planned for Estate Taxes.
Probate is the official procedure whereby all expenses, taxes, and debts are paid and the remainder of the decedent’s property is transferred to the proper parties. The procedure is supervised by the probate court, whose duty it is to ensure that everything is done fairly and properly. This system protects the intended recipients of a decedent’s property. All property owned solely by an individual must go through the Probate process whether or not there is a Will. Jointly owned property and property with a named beneficiary (life insurance, IRA’s) and property held in a Trust, does not become part of the Probate process. The rules of Probate are complex but some states have adopted newer, and easier systems. You can plan to avoid Probate if necessary, but those with simple situations may not need to avoid Probate. See your lawyer to discuss this issue as well.