Real Time Web Analytics


Tuesday, July 20, 2010

The perils of home-made Wills

The unfortunate thing about making a mistake in a Will is that the mistake usually isn't discovered until the testator has died and there is no chance to correct the error. The family and friends left behind are the ones trying to figure out what to do with a Will that causes the problem. Often it ends up being decided by a judge.

I recently saw a Will of a deceased person who left a large sum of money to a family member on the condition that the family member stop smoking. The Will went on to say that if the family member started smoking again within two years, the money had to be repaid to the estate. This is completely unenforceable. And even if it were enforceable, what happens to the money if it is repaid to the estate?

I saw another Will in which the testator divided up her entire estate among family members. After that, she said that she wanted to give her pets to a certain person, along with a yearly amount of money to cover the expenses for the pets. But if she has already given away her estate, where is the yearly money coming from?

Another Will left each of the testator's six children an individual piece of real estate. Unfortunately, the testator didn't think about taxes. When real estate is transferred to a beneficiary, it is subject to capital gains tax to be paid by the estate, unless it is the testator's principal residence. This person had six parcels of land and only one could be the principal residence. There was no cash in the estate to pay taxes, so at least one of the properties would have to be sold.

What all of these cases - and many, many more - have in common is that the wishes of the testator are simply not going to be carried out if the Will is worded in the way the testator directs. Yes, there is a Will in each case, and on the face of it, each is a valid Will, but the documents are ineffective.

Two of the above-mentioned Wills were home-made. I caught the other (the one with the pets) when it crossed my desk. I believe that if your affairs are completely straightforward and simple, you may be able to make your own Will, though I never think it's a very good idea. However, these examples show that even people who believe things to be straightforward (six children, six properties, sounds simple, right?) can benefit greatly from estate-planning advice.

There is very little value in putting together a Will yourself if all you're doing is creating problems for your spouse or children or executor. Wills like those I've mentioned here usually end up being interpreted by a judge, which means that instead of paying to get a Will made, your estate is paying a lawyer to make a court application. The Will would have been a heck of a lot cheaper.

No comments:

Post a Comment

You might also like

Related Posts with Thumbnails