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Five Overlooked Provisions for a Last Will and Testament

A Last Will and Testament (LWT) is a cornerstone of estate planning, which outlines estate administration and the designation of beneficiaries after passing. However, several important decisions and provisions are often overlooked. These omissions can lead to unintended consequences, delays in the probate process, and even legal challenges in real estate transactions.

In a survey, 74% of the participants don’t have a will. They cite confusion surrounding probate and estate administration. Even with positive sentiments towards estate litigation and planning (60% of respondents consider it valuable, many (over 30% in the US and over 57% in Canada) don’t translate that sentiment into action. The estate planning process might seem daunting, but drafting wills protects your loved one from navigating a confusing legal battle.

To make probate and estate administration easier for you, we’ll discuss the commonly overlooked provisions regarding wills and estate matters. Get valuable insights from an ‘estate attorney near me’ for these legal matters.  

The No Contest Clause

A No Contest Clause (NCC), also known as an “in terrorem clause,” is a provision within a last will and testament (LWT) to deter beneficiaries from challenging the wills and estate validity in the estate and real estate law. It functions as a deterrent by stipulating that any beneficiary who initiates legal services contest against the will forfeits their inheritance under estate administration process terms.

Statistics from the American Bar Association, compiled by estate lawyers, indicate that roughly 2% of wills are contested nationally. An NCC discourages baseless challenges from disgruntled beneficiaries, potentially saving estate litigation costs and delays.

Potential Drawbacks

Undue Influence Concerns

A poorly drafted NCC, particularly one that uses overly broad language, might raise concerns of undue influence in estate documents and representation agreements. If a beneficiary can demonstrate they were pressured or coerced into accepting the will’s terms due to the NCC, the clause itself could be challenged. It can potentially invalidate the entire will of a family’s estate.

Fair Contest Exception

Most jurisdictions recognize a “fair contest” exception to NCC enforcement. This exception allows a beneficiary to challenge the will in court if they have a legitimate basis, such as evidence of forgery, lack of testamentary capacity (the testator’s mental ability to create a will), or undue influence. You can talk to a real estate lawyer Surrey for advice. 

Strained Family Relationships

NCCs can have a chilling effect on open communication within families. Beneficiaries with legitimate concerns about the will’s validity may be hesitant to raise them to estate lawyers for fear of losing their inheritance entirely.

Alternate Beneficiaries

Secondary beneficiaries (alternate beneficiaries) inherit designated assets (i.e., real estate, health care plans, trusts) in a business succession planning if the primary beneficiaries predecease you, decline the inheritance, or are deemed unfit to receive them due to legal reasons.

Mitigating Intestacy

Intestacy transpires when someone dies without a valid LWT or when a portion of the estate is not addressed within the representation agreement or power of attorney.  In the succession act, business law dictates the distribution of the intestate assets of a business owner, which may not align with your wills variation claim. The American Bar Association indicated that 38% of adults in the US die intestate.

Addressing Beneficiary Incapacity

Minority

In most jurisdictions, individuals must reach the age of majority (typically 18) to inherit real estate property in a law firm. An alternate beneficiary designation safeguards against the need for court intervention to establish a custodian or conservator to manage the inheritance on the minor’s behalf.

Legal Incapacity

If a primary beneficiary is deemed legally incapacitated due to mental illness, dementia, or substance abuse, they may be unable to manage the inheritance responsibly. An alternate beneficiary designation ensures the assets are transferred to a responsible individual who has sufficient knowledge and can manage them for the intended beneficiary’s benefit.

Creditor Claims

In some cases, a primary beneficiary’s outstanding debts could lead to creditors seizing their inheritance to satisfy outstanding judgments. An alternate beneficiary designation ensures the assets are not depleted by the primary beneficiary’s pre-existing obligations.

Specific Bequests of Personal Property

Specific bequests of personal property allow you to designate specific items to particular individuals. This promotes clarity of joint ownership while potentially minimizing disputes among beneficiaries.

Beyond Monetary Value

Jewelry and Heirlooms These items hold significant sentimental value beyond their monetary worth. Specific bequests ensure they are passed down to intended recipients who appreciate their family history and emotional significance.
Art and Collectibles For collectors, specific bequests safeguard the sale and distribution of these assets to individuals who share their passion and will appreciate them.
Personal Effects Items like furniture, artwork, and memorabilia can hold sentimental value for specific beneficiaries of estates. Specific bequests ensure these cherished items reach their intended recipients.

Supplemental Documentation

While detailed descriptions are important, consider using supplemental documentation to enhance clarity further.

  • Attaching photographs of the bequeathed items provides a visual reference, eliminating any ambiguity regarding the intended recipient.
  • For valuable items like jewelry or artwork, including appraisals within the LWT or as an attached document can be helpful.  This establishes a baseline value for insurance purposes and potential future disputes.
  • For extensive collections of similar items (e.g., coin collections), consider creating a detailed inventory that is referenced within the Will.  This ensures each item is accounted for and distributed as intended.

Guardianship Provisions for Your Children’s Well-Being

For parents, a Last Will and Testament (LWT) designates an individual or couple (the guardian) to assume legal responsibility for their children’s care and wellness after passing.

A designated guardian has legal and practical responsibilities:

Physical Custody The guardian assumes primary responsibility for the child’s physical care, including housing, food, and daily needs.
Medical Care The guardian has the authority to make medical decisions on the child’s behalf to ensure the child receives necessary medical treatment while adhering to their established healthcare preferences.
Education The guardian ensures the child’s educational well-being, enrolling them in school and making decisions regarding their educational path.
Financial Management The guardian manages the child’s financial assets, including any inheritances or trust funds. This ensures responsible financial stewardship until the child reaches the age of majority.

Consequences of Overlooking Guardianship Provisions

  • In the absence of a designated guardian, the court intervenes with a court-appointed guardianship.
  • Without a designated guardian, your children’s living situation becomes uncertain.
  • The loss of a parent is a highly emotional and destabilizing experience for children. An unfamiliar living arrangement with a court-appointed guardian can further exacerbate their emotional distress.
  • If you have extended family members, disagreements may arise regarding who should care for your children.
  • Financial resources designated for your children’s care and education may be mismanaged or delayed in the absence of a designated guardian to oversee their finances.

Digital Assets and Estate Planning

Beyond traditional tangible and financial assets, there’s a growing category known as Digital Assets within estate planning strategies.

Financial Accounts Online banking accounts, investment platforms holding digital assets (e.g., cryptocurrency), and electronic tax records.
Social Media Accounts Profiles on platforms like Facebook, Twitter, and Instagram may hold sentimental value and potentially even financial worth.
Digital Content E-books, music libraries, movie collections, and software licenses are acquired online.
Cloud Storage Data stored on online platforms like Dropbox or Google Drive, which may include personal documents, photos, and creative work.
Domain Names and Websites These can hold intrinsic value and require continuity of ownership after your passing.

Challenge of Access

Many online platforms have strict Terms of Service (TOS) governing account access and inheritance in real estate transactions. It is important to understand these restrictions and obtain the necessary login credentials for your executor.

 

 

Secure Your Legacy Today 

Considering these often-overlooked provisions strengthens the effectiveness of your LWT and safeguards your wishes. From mitigating intestacy risks and tax planning to ensuring the well-being of your loved ones, these elements contribute to a comprehensive and secure estate plan.

Don’t leave your legacy to chance; get the legal services of dependable estate lawyers to assist you in navigating the complex estate and family law. Estate lawyers from NG Sidhu are well-versed in securing your best interests. Schedule a consultation with competent estate planning lawyers and ensure your LWT reflects your wishes for the future.

 

Frequently Asked Questions

 

My state has a specific law regarding intestacy.  Does a No Contest Clause supersede that law entirely?

No, a No Contest Clause cannot supersede your state’s intestacy laws. However, it can deter challenges that would otherwise trigger intestacy. For instance, if a disgruntled beneficiary contests the will based on a minor technicality and loses due to the No Contest Clause, the estate would be distributed according to the terms of wills, not the state intestacy law.

When designating alternate beneficiaries, can I use a beneficiary designation form from my financial institution instead of including them in my Will?

While beneficiary designations on financial accounts supersede anything in your will, it’s still wise to include them for several reasons. 

  • Will provide a central document outlining your overall distribution plan.
  • It allows you to designate alternate beneficiaries for non-financial assets. 
  • It ensures your wishes are clear in case the beneficiary designation form is misplaced or challenged.

For specific bequests of personal property, can I reference a separate, detailed inventory document instead of including full descriptions within the will itself?

Yes, you can reference a separate inventory document within your will for detailed descriptions of bequeathed personal property. However, you must ensure the will clearly reference important documents and specify their location for easy access by the executor. You should also consider attaching a copy of the inventory to the original will for safekeeping.

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