Making A Will: Some Things That Can and Can't Be Accomplished

The primary purpose most people have for making a Will is to insure that, upon death, their possessions pass to those individuals and organizations they want to receive them. In the absence of a Will, or other legally effective devices by which property can be transferred in accordance with an estate plan, an individual's personal property passes according to the "laws of inheritance" of the person's home state. [However, REAL property located in another state or in a foreign country will pass to survivors according to the laws of the jurisdiction in which the realty is located]. These statutes vary from state to state so that which relatives are "legal heirs" for purposes of inheritance will depend on which state was the deceased person's home at the time of his or her death.

When an individual dies, his or her Will does not take effect automatically. On the contrary, the original document must be submitted to the appropriate court in the county in which the deceased person resided, and "offered for probate." In the probate proceeding, the Will is "proved" to have been validly executed by the deceased individual while that person was in sound mind and not under undue influence or coercion. The party offering the Will for probate, usually the Executor nominated in the Will by the deceased person, must, by law, give notice of the proceeding to the person's "legal heirs," i.e., the relatives specified in the state's statute as "next of kin." And this is where the initial opportunity for dispute arises. While the Executor will function and the beneficiaries will take their gifts under the Will only if the Will is determined to be valid, the "legal heirs" of the deceased will take the property only if the Will is set aside as invalid, for whatever reason. It is in the probate proceeding, the first step in the administration of the estate of a person who died having a Will, that this basic and primary question is determined. Did the deceased die "testate," i.e., having validly executed a proper Will?

My point in describing this initial step in estate administration is to make clear that having a Will cannot eliminate the possibility of dispute between one's "legal heirs" and the people one names as beneficiaries in his or her Will. No matter what a person does, his or her heirs will have the right to question the validity of a Will offered for probate by examining that document thoroughly and questioning the circumstances surrounding its execution. (While I say the deceased person's heirs have this right, in fact, such examination is conducted by attorneys representing the heirs.)

Having acknowledged the rights of the heirs, however, it is most important to emphasize that a validly executed Will, especially one prepared in careful consultation with an attorney skilled in this area of the law, is extremely difficult to overturn. An executor or beneficiary armed with the authority of a properly prepared and executed Will is in a very strong legal position and will generally prevail in the probate proceeding.

Let's consider some of the major elements of the Will itself. What is in a Will and what can a person accomplish by having one? And, while we're at it, let's get down some of the legal terminology involving Wills.

A Will is a legal declaration of how a person wishes his possessions to be disposed of after his or her death. A person making a Will is called a "Testator."

More specifically, a Will is a legal declaration taking effect only upon the Testator's death and fully revocable by the Testator during his or her lifetime, written and signed in accordance with exact requirements established by Statute, by which a Testator may direct: (1) how his or her property is to be disposed of upon death (and/or how such property is NOT to be disposed of), (2) how the Testator's body or any part of it is to be disposed of, (3) who the Testator desires to serve as the estate's Executor, and (4) who the Testator wishes to serve as Guardian of any minor children the Testator may have at the time of his or her death, assuming the other natural parent of such children has predeceased the Testator.

By carefully drafting your Will with the assistance of your attorney, these four primary functions can be achieved, depending upon your needs and circumstances. Let's briefly consider these four major concerns and examine how your Will can realize your intentions with regard to each of them.

DISPOSAL OF REMAINS AND FUNERAL ARRANGEMENTS

In the absence of a Will, or in the absence of a provision in your Will as to the disposition of your remains and funeral arrangements, a deceased person's body passes to his or her "next of kin," i.e., the closest relatives in the person's family. (It may be possible, by the way, for a person to direct the disposition of his or her remains by giving expression to that desire without employing a Will for that purpose, but, since such instances are rare and this discussion is focusing on preparing your Will, that is the vehicle of expression being emphasized here.) At that point, it is entirely the right of such relative(s) to determine what is to be done with the person's remains and what funeral arrangements, if any, are to be made.

By making a provision in your Will, you can direct that your body be buried, cremated or donated to an appropriate institution for scientific and medical purposes. Similarly, a Testator can direct the donation of any parts or organs of his or her body for transplant to a patient requiring such part or organ. And the Testator can specify what, if any, funeral arrangements he or she wishes, including whether or not religious services are desired and of what type. Additionally, the Testator can specify who he or she wishes to supervise the specified arrangements. On the practical level, it should be remembered that such instructions with regard to funerals and manner of disposition of a deceased person's remains must be readily available upon the person's death. Therefore, the Testator should be certain to inform whoever is to arrange these matters about his or her directions and the location of the Will that contains these instructions.

In general, the nominated Executor should be aware of where the Testator has placed his Will or the name and address of the Testator's attorney, especially if that attorney is holding the original Will. The Testator's original Will, as opposed to unexecuted copies, should NOT be kept in the Testator's safe deposit box or anywhere else where the document would not be readily available to the nominated Executor upon the Testator's death. Availability of the original Will to the Executor is important both because any funeral directions must be immediately known in order to comply with them and because the Executor must present the original Will (not a copy) to the Surrogate's Court when the Will is submitted to the Court for probate.

NAMING THE EXECUTOR OF YOUR ESTATE

The Will which you and your attorney are preparing is not a self- executing instrument. Upon your death, it is the nominated Executor's responsibility to retain an attorney, offer the original Will to the appropriate court for "probate," obtain letters of authority (called "Letters Testamentary") from that Court and generally supervise the administration of your estate.

He or she, as your Executor, is charged with the responsibility of seeing that your directions and intentions, as expressed in your Will, are fulfilled in a reasonable and prompt manner. Therefore, this provision naming your Executor expresses one of your most important decisions.

Unless otherwise provided in your Will, your Executor will be entitled, by law, to payment of commissions from the assets of your estate for the services he or she has performed in this capacity. These commissions are governed by Statute and are expressed as a percentage of the estate.

The Testator can name more than one Executor (co-Executors), and, if the estate is sufficiently large (at least greater than $500,000), an institutional Executor, such as a Bank, may be advisable. However, it should be remembered that Executors may each be entitled to a commission for their services and, therefore, nominating more than one Executor could increase the costs of administering your estate.

It cannot be emphasized too strongly that while the Will expresses your desires, your Executor will see to it that your wishes are actually carried out -- or fail in performing this obligation. As Executor, he or she has the authority of the court to assure that your instructions are followed. But that authority must be asserted by the Executor in order to be effective. Therefore, the importance of choosing a capable and resolute individual is evident in all cases, and the particular circumstances of individual cases may make this even more essential.

DISPOSITION OF YOUR PROPERTY

It is usually for the purpose of making gifts of property that a Testator prepares a Will. In any estate, the expenses of the Testator's funeral, estate taxes, costs of administration and the debts of the Testator at the time of his or her death take priority over all other payments -- including the gifts made to beneficiaries under the Will. With one exception, the Testator is free to dispose of his or her NET estate (ie., the assets remaining after the expenses of funeral, administration, taxes and debts are paid) in any way the Testator chooses.

The one exception here is with regard to the Testator's (heterosexual and legal) spouse who has a "Right of Election" against the deceased spouse's estate. In New York, for example, in the absence of a "qualifying disposition" in the deceased spouse's Will, the surviving spouse is entitled by law to the "elective share amount" from the deceased spouse's estate. This "elective share" is a fraction of the net estate as it is particularly calculated for the purpose of determining the "elective share." If the deceased spouse is survived by any issue, as well as the surviving spouse, then the elective share is one-third of the net estate. If the deceased spouse is survived by no issue, but just the surviving spouse, then the elective share is one-half of the net estate. The practical effect of this law is that the Testator can disinherit anyone except his or her spouse, unless such spouse has formally "waived" her or his right of election.

Finally, the property that a Testator may transfer to beneficiaries under his or her Will must be property which will be part of the "probate estate." Title to property can be held in various forms and it is important to realize that property can pass "outside" an individual's Will. Property that passes under the Will is referred to as property included in the "probate estate."

Some property will pass outside an individual's probate estate because of the form of title. For example, where property is held jointly, with right of survivorship, this asset will pass outside the individual's Will to the surviving joint tenant. Similarly, a totten trust, i.e., an account held "in trust" for another will pass directly to the named beneficiary, unless the will specifies a change in strict compliance with technical requirements.

Still other property interests will pass outside an individual's probate estate because these assets are governed by an existing contract. For example, unless the individual's estate is named as the beneficiary, the proceeds of life insurance policies and pension plan proceeds ordinarily will not pass under an individual's Will.

Another very important distinction about property is that between a person's "probate estate" and his or her "taxable estate." Transfers of property at death, whether under a Will, by inheritance, or by any other method of transfer, may be subject to Federal and State transfer taxes. Most of the time, while assets may be held or transferred so as not to be part of one's probate estate, in most cases, such assets will still be part of one's taxable estate. The jointly held property, the life insurance proceeds, the totten trust account, for example, will still be subject to transfer taxes. While there are sometimes advantages to holding property in ways that take the property out of one's probate estate, avoiding transfer taxes at death is not one of them.

APPOINTMENT OF GUARDIAN OF MINOR CHILDREN

We are often unaware of how many lesbians and gay men have children. Whether resulting from prior heterosexual activity or adoption, many gay men and women do choose to have children. For any people who have minor children, one of the most important aspects of having a Will is the opportunity it provides to specify who will be the legal guardian of such children, should the Testator die not survived by the other parent of such children. In those cases where the other parent is alive, the surviving parent will automatically be the children's legal guardian.

CONCLUSION

This article has outlined some of the basics involved in preparing a Will. It is meant to be an overview of the subject and can only address the more common situations encountered by attorneys counseling clients about Wills. By choosing to have a Will, an individual makes the wise choice to arrange his or her affairs so that the primary legacy to surviving lovers, friends and relatives will be an orderly and thoughtful plan for his or her estate, rather than the chaos and confusion that can otherwise result. There is no question that leaving this legally enforceable document will be of great significance in assuring that your wishes will be respected and that your loved ones will be protected. Considering the many problems peculiar to lesbians and gay men in our society, it is especially advisable for each of us to determine whether such planning will be effective in accomplishing these objectives.

SOME OTHER IMPORTANT DOCUMENTS TO CONSIDER IN ADDITION TO YOUR WILL:

A POWER OF ATTORNEY is an instrument by which one person (the "Principal") authorizes another person (the "Agent" or "Attorney- in-Fact") to act for the Principal should he or she become disabled or unavailable. By signing a Power of Attorney, you enable the your Agent named in that document to have access to your funds, pay your bills, obtain your assets and satisfy your liabilities. An "ordinary" Power of Attorney will terminate upon the Principal's mental disability (e.g., if he or she became comatose or insane). New York, however, permits a "durable" Power of Attorney which remains in effect, even in the event of such mental disability. All Powers of Attorney terminate upon the death of the Principal granting them. Since an Agent named to act for another in this manner has such important authority over the Principal's property, it is very important to carefully consider to whom one gives his or her Power of Attorney.
A HEALTH CARE PROXY is a written instrument by which an individual ("the Principal") designates another person as his or her Agent to make health care decisions for the principal while he or she is incapable of making them because of illness, unconsciousness or dementia. The Agent's authority to make health care decisions for the Principal take effect ONLY when and if the Principal becomes incapable of making such decisions for him or herself, and the Agent is required to make these decisions based on his or her "reasonable knowledge" of the Principal's wishes and desires or, if unknown, based on the "best interests" of the Principal. However, with regard to artificial hydration and nutrition, the Agent may only make medical decisions based on knowledge of the patient's wishes. Therefore, it is advisable that a Health Care Proxy make specific reference to the Principal's wishes concerning artificial nutrition and hydration. Despite the same "Principal/ Agent" terminology, a Health Care Proxy is NOT a Power of Attorney, each instrument being entirely different in purpose and in form.
A LIVING WILL is a health care directive by an individual in which he or she states that life sustaining treatment is to be withheld or withdrawn in the event he or she has become functionally and/or mentally incompetent while afflicted with terminal illness with no hope of lasting recovery. Although Living Wills are authorized in some 40 states, they are not authorized by any statute in New York at this time. New York's legislature has adopted the health care proxy approach (discussed above) to health care planning. However a Living Will does serve to indicate an individual's intent and desires with regard to medical measures in terminal situations, and may be enforced by New York courts.
A DESIGNATION OF COMMITTEE and CONSERVATOR is an instrument by which an individual nominates people to make decisions about his or her person and/or property, in the event of future incapacity or impairment. A very significant characteristic of Conservators and Committees is that they must be formally appointed in court proceedings. Committees (which usually consist of an individual, despite the plural name) are appointed by a court to care for an individual who has become mentally incompetent to care for himself or his property. As a result, a person for whom a committee is appointed suffers the dire consequences of a public declaration of mental incompetence and the loss of civil liberties.

A far less drastic approach is to petition a court for the appointment of a Conservator. A Conservator is designated by a court to manage a person's property when he or she has become "substantially impaired" and is no longer able to do so him/herself. Appointments of Committees or Conservators require adjudication in judicial proceedings and are time consuming and expensive. By signing Durable Powers of Attorney, or by establishing Trusts, many people seek to avoid the necessity of these court-appointed representatives. The purpose of preparing an instrument that nominates a Committee or a Conservator is to allow an individual to make his or her own choices known to the court, should the situation ever arise. However, by signing the various Powers of Attorney, or by setting up trusts, it is a reasonable expectation that such costly judicial involvement can be avoided in the management of one's personal affairs.

SOME LEGAL TERMS

An "ATTORNEY-IN-FACT" or "AGENT" is a person given authority to act for another under a Power of Attorney. A person named in a Health Care Proxy to make health care decisions for another is also called an AGENT.
A "PRINCIPAL" is a person who signs a Power of Attorney authorizing another to act in his or her place. A person naming an Agent in a Health Care Proxy is also called a PRINCIPAL.
A "CONSERVATOR" is a person appointed by a court to manage the property of a person who can no longer do so because of "substantial impairment."
A "CONSERVATEE" is a person for whom a court has appointed a conservator because the court has determined that the person is "substantially impaired" and can no longer manage his or her own property.
A "COMMITTEE" is a person (or persons) appointed by a court to make decisions for a person who the court has determined is mentally incompetent.
An "INCOMPETENT PERSON" is a person who is adjudged by a court to be unable to manage him/herself or his/her affairs because of mental disability, and for whom the court will appoint a Committee.

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