How much is too much? the price of a Will….

There was a wonderful, amusing article written in Time Magazine over the weekend by Joel Stein entitled “I can’t take it with me“. A couple of things stood out for me. Firstly how uncomfortable his estate planning attorney made him feel throughout the process of creating a Last Will and Testament. On more than one occasion the attorney made the point that the author didn’t have much money and his estate was quite small (this in spite of owning a house in Los Angeles and a condo in Manhattan). I’m not sure why an attorney would make the uncomfortable process of meeting with an estate planning professional any worse than it already is.

The attorney then went on to present every worst case scenario to his clients, which on the one hand is laudable, but asking a husband and wife if they trust each other is probably the wrong approach.

But more than the heavy-handed interaction and the belittling of the client, this was the sentence that stood out for me;

“The fee for all of this thinking about my death was going to be $5,000 to $8,000. Which seemed like a lot to pay someone, even if it meant he’d have to say I have a sound body. I asked if we could just slip Allan B. Cutrow, Esq., that amount in our will, but he didn’t seem up for that.”

So this was a Last Will and Testament being written up for a client who “didn’t have a lot of money” where the main beneficiary would be the spouse with a minor child as the alternate. There would also be a trust fund set up for the minor child. EIGHT THOUSAND DOLLARS !!!

This isn’t so out of sync with other articles we’ve read, like the Forbes article in which the author explained that their estate planning package cost her $4,500, 15 years ago.

We’ve had many people using our service frozen out of professional advice, like the one senior lady who needed to make a few changes to her Will and was quote $100 per edit. It’s little wonder that services like LegalWills are flourishing. Joel Stein could perhaps have created an identical Last Will and Testament using LegalWills, and instead of paying $8,000 he would have paid $34.95. And don’t forget, the $8,000 attorney would only have used software to create the documents based on information that he entered into the system. Not many clauses are created from scratch nowadays.

A service like the one at LegalWills may not be right for everybody, and complicated affairs need specialized legal advice, but when people are being charged so much money for so little advice the legal profession are not making themselves very accessible. Maybe $5,000 or $8,000 doesn’t seem like a great deal of money to a Manhattan lawyer, but this could be one of the reasons why over 70% of adults have not written their Will.

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No, you don’t just help yourself…

Once in a while at LegalWills we receive questions along the lines of “my father just died, but he didn’t have a Will, is everything now mine?”. We don’t offer legal advice at LegalWills but I think it’s worth giving some detail as to why there isn’t just a free-for-all and a race to grab possessions when a person dies without a Will.

Tempting as it is to just assume that everything may just be yours for the taking, you are not allowed to just go help yourself to things. Usually, an estate still needs to be valued, taxes may still have to be paid, there may be some claims on the estate from people owed money, or dependents who have been relying on the person who died. Funeral expenses are also usually paid out of the estate before it is shared between beneficiaries.

Even once all the liabilities are paid out, it is not always obvious who gets what. For example, it is very common for a spouse to assume that they just take everything if their partner dies without a Will, but this is a serious misconception. Every jurisdiction has a law that determines how an estate will be distributed if the person dies without a Will – Intestate laws. These vary between jurisdictions, but we can give some specifics in this article.

In England and Wales, if a person dies without a Will (dying “intestate”), the estate is divided in the following way;

In Ontario, the intestate laws can be laid out in a table:

In Montana, the following applies;

You can look up the intestacy laws for your own jurisdiction, and there are differences. If you are an only child and your father dies before your mother, you can see from these tables that in Montana you will receive nothing, in England you would receive half of everything over £250,000, and in Ontario you will receive half of everything over $200,000. Incidentally, in New York you would get half of everything over the first $50,000.

So there are a couple of important lessons here. Firstly, you cannot go helping yourself to possessions when a person dies without a Will; the law dictates who gets what and the law varies widely depending on your jurisdiction. The second important lesson is to write your Will. If you have a Last Will and Testament in place, you can decide where your possessions will go – without one, it will all depend on where you live. Fortunately now with services like those at LegalWills you can have your legal Last Will and Testament in your hands in about 30 minutes.

The Joint Last Will and Testament

A quick primer on different types of Wills:

We often receive requests at LegalWills for partners to create a Joint Last Will and Testament, meaning that they want one Will to cover the estate planning of usually, a husband and a wife. We even occasionally hear the question “I have now created my Will, does my wife also need one?”

A Joint Will is a single document that covers the Wills of two (or more) people. On the death of each person, the Will is administered for the deceased and the Will is then supposed to serve as the Last Will and Testament of the surviving partner. However, our services cover Canada the US and the UK and our position at LegalWills is that no matter what advantage a couple is seeking to gain from creating a Joint Will, they would be better served with each person having their own individual Will. Joint Wills can cause a number of problems when for example the surviving partner moves on with their life and has a change of circumstance or even a remarriage. It is always unclear how strictly a surviving partner is bound by the terms of an old Joint Will. Historically, Joint Wills were used more frequently because they were regarded as a labour-saving technique to save the lawyer some time, but today with every document being creating automatically, there is hardly any time-saving at all.

In some jurisdictions the term “Mutual Will” is used. These are separate Wills created with an agreement that neither Will is to be cancelled or altered after one of the partners has died. This is a very difficult scenario to protect legally and lawyers often encourage partners to make a moral obligation to each other rather than be bound by a legal document. At LegalWills the same advise applies and we do not support Mutual Wills.

The most common solution for couples is a Reciprocal Will or Mirror Will. This type of Will has each partner naming the other as the main beneficiary with perhaps children as alternate beneficiaries. This is very common not only for married couples but also for civil partners or those in civil unions. Each Reciprocal Will is separate and there is no binding agreement applied to the surviving partner who is perfectly entitled to amend this Will or prepare a brand new Will in the future.

At LegalWills we do not support Joint Wills and if anybody asks us about Joint Wills we tend to discourage them. Neither do we support Mutual Wills.

We do however allow for people to create Reciprocal or Mirror Wills and this aligns with our philosophy that every single person needs to have a Last Will and Testament in place.

A Guardian for a child…

In almost all of our blog posts we explain why everybody should have a Last Will and Testament, but for parents it is extremely important and for single parents, even more so. A Will allows parents (or a sole parent) to state a preference for who they would like to raise their children if they die (including if for example both parents are involved in a common accident). It usually also allows the parent to explain the reasons why this person is their preferred choice.

If both parents are involved in a common accident, or a single parent has sole custody of a child and then dies, one of three things will happen if there is no Guardian named in a Will;

  • Somebody will come forward and offer to look after the child or children. This person will then have to apply to the courts for formal custody and they will be legally granted custody.
  • More than one person will come forward and there will be a dispute over who is the most suitable and the family courts will decide based on the best interests of the child.
  • Nobody will come forward in which case the child or children will become “children in need of protection” and will be put in the care of the child services agency

If a Guardian is named in a Will most jurisdictions will grant custody to this person. If other friends or family members dispute this selection the process varies by jurisdiction but usually preference is given to the person named in the Will. In some jurisdictions the “Guardian by Will”  has to be shown to be unfit before the judge will grant the guardianship to another person.

So what factors should go into making this decision? here are a few, but they are subjective and the decision is ultimately a very personal one;

Friend or family member? It would seem that by default, all things being equal, a family member would be preferred over a friend, but the other factors below may make a friend a more suitable choice.

Geographic location? – you would have to decide if it appropriate to move the children across the country or even around the World. A decision that may seem suitable for a young child may not be the right decision for a teenager.

Age? – Both the age of the Guardians and also the age of the children. It probably doesn’t make sense to name grandparents as the Guardian of a two-year old when that responsibility will last another fifteen or sixteen years, but perhaps they may be suitable Guardians of a sixteen year old.

Children of their own? – Is it more appropriate to name a Guardian who already has one or two children of their own, or is this too much of an additional burden. Many families have reached a balance and introducing one or two additional children may add to much strain to the family. Even practicalities of sleeping arrangements may be logistically very difficult. On the other hand, if a happy couple have decided not to have children, it may severely cramp their lifestyle to introduce a toddler into their care.

Financial means? – There is a good chance that a trust will be set up for the children that can be drawn upon by the Guardians, and this would help pay for education and health care. But there still may be a financial burden imposed on the Guardians for the care of the children. The financial means of the Guardians may be an influencing factor.

Values? – Of course, the religious, spiritual, and general lifestyle values are critical in selecting a Guardian. This is also a factor that changes in weight depending on the age of the child.

Emotional ties? – One of the most important factors is that you want the child to join a loving home and hopefully a stable family environment. The guardians should have an emotional investment in the well-being of the children. There are many stories of family members being chosen ahead of friends, but the family members not even particularly liking the children. You then end up with the type of family environment described by Lemony Snickett and the Brothers Grimm.

Keeping the children together? – If you have more than one child, you would have the option of naming a different Guardian for each child. It is an extremely difficult decision but one that needs careful consideration.

As we noted in a previous post, if you have included the name of a preferred guardian in your Will, then this can be submitted to the family courts and will be a crucial piece of information for the judge to ponder when the guardianship is granted. Of course, remember that you should also discuss guardianship with the individual or family that you have named before finalizing your Will. It should not come as a shock to them and you must know that they are willing to take on the role. Just by including your preference in your Will, they are not legally bound to accept the responsibility.

It is also important to note that these factors do change in importance as the children grow and as the circumstances of friends and family change. You may have named your sister as the Guardian, who then has triplets, or who starts to have family difficulties of her own. At any point, your preferred Guardian may no longer be the most suitable person and this is one of the key reasons for a regular review and update of your Will.

People are sometimes reluctant to review their Will on a regular basis, but if you have a Guardian named in the Will it is worth spending a few minutes each year making sure this person is still suitable. Of course, at LegalWills this can be done quickly and easily by just logging into your account, making a change and printing a new document. But even if you’ve chosen to create a Will with a lawyer, you should review your choice of Guardian regularly.

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A quick update to a Last Will and Testament

It happens a lot.

  • A beneficiary needs to be changed, or their details need to be changed.
  • There’s a new child or grandchild.
  • One of the assets is no longer owned.
  • Bank account details have changed.
  • The Executor has passed away.
  • The children are now adults
  • The personal guardian has just had triplets of their own
  • One of the beneficiaries just came into some money

this list could go on and on, as there are countless reasons why a part of a Will may need a quick update. So if you do need to make a very minor change, what options are available to you?

Handwritten changes.
Often people are tempted to just put a line through the offending word or sentence, and make a quick change. Technically, if this handwritten amendment is initialed and witnessed, it may pass as a legal change, but it is inviting trouble. In general we would recommend never, ever writing on a Will, even if it is just to change one single word. The obvious risk is a challenge to the Will based on fraud and a claim that somebody else in fact made the change.

A Codicil
You may have heard of a codicil; this is a document that makes reference to the original Will, describes the required change and is then signed and witnessed in exactly the same way as a full Last Will and Testament. In practice this rarely serves as a shortcut because the signing requirements are the same. Furthermore, it is probably more difficult to write your own codicil as it is to write your own Will as there are very few resources and tools available to help in the process. There is still a certain amount of “legalese” that needs to appear in a codicil; statements like “in all other aspects I reaffirm my Will dated …..” which is not a sentence that comes naturally to most people.

Re-typing the Will
I met people over the holidays who had a thirty year old Will and wanted to make some minor changes. Their plan was to just re-type their entire Will and change the sections that needed updating. This is generally a risky strategy. Although a Will written and signed 30 years ago would still be valid, laws do change as does legal terminology, so re-writing a 30-year-old Will may not adhere to legal requirements today.

Returning to a lawyer’s office
Although this is perhaps gives you the greatest peace of mind, for many people it would seem like an expensive and inconvenient option. If you are lucky, the lawyer may take the opportunity to review the entire Will, but if it’s just one or two words, or names that need to be changed, it may not be a very cost-effective process at all. We have heard of lawyers charging “per amendment” and so a seemingly innocuous change can end up costing hundreds of dollars in legal fees even though no actual legal advice was required. It’s interesting that many lawyers will argue that preparing a Will yourself will open yourself up to a legal challenge when paradoxically the exact opposite may be the case. The disputes that we’ve seen recently are related to lawyer created Wills that the testator has tried to maintain themselves using handwritten changes and attached amendments – probably because the effort of returning to a lawyer was too inconvenient or expensive for them.

This is one of the reasons why online services like those at LegalWills are becoming more popular. You can not only create your Will, but you can return at any time to make an update and then create a new Will to reflect a change on your personal or financial situation. It’s bad enough that 70 percent of adults don’t have a legal Will, but even worse that of the 30 percent who do, many haven’t maintained them because of the lack of traditional options available to them.

The Last Will and Testament of our children

Today’s post is nothing more than an opinion, but speculation about the future of the Last Will and Testament. For the most part, the field of law is very traditional. Lawyers are generally speaking slow adopters of technology, and the law itself is painfully slow to adapt to change. But the World we live in is changing dramatically quickly and technology is becoming a core part of most people’s lives. Especially the lives of our children growing up who are always connected, always trying new things, and quick to understand and use new services and technologies. You only have to look at the legal issues surrounding things like intellectual property, content streaming, Wikileaks or even something as simple as taxation to see how difficult it is for the law to tackle the new hyper-connected World. At LegalWills we witnessed an attempt at intellectual property theft with developers on the other side of the World trying to reverse engineer our services and found that legally there was very little we could do about it. The US patent office is coming under increasing criticism for granting patents for technologies that they clearly barely understand and almost every day we see frivolous claims for things like social networking. In fact Twitter has been sued for patent infringement countless times in the last year including this one for mass notifications, Facebook have also had their share. including infringing on “System for creating a community for users with common interests to interact in”. One of the more famous claims was BT’s claim on links on a website !!

But this is all a prelude to the Wills discussion. Today a Will must be written (usually on paper, but in theory written on something is fine like a handwritten Will on a piece of wood) and then signed in the presence of witnesses to become a legal document. So what is the long-term viability of this law? It seems that our children will find writing on a piece of paper a little anachronistic in 20 years time, especially when it’s such an ineffective tool; somebody has to find it, hope that it hasn’t been burned or destroyed, hope that nobody has meddled with it, inserted pages, removed pages, it hasn’t been lost, the version that they have is indeed the Last Will and Testament and not an old version. Writing on a piece of paper is a horribly inefficient way of preparing a Last Will and Testament especially with the tools available to us today. Surely in 20 years time the law will allow for video Wills, Wills that have been stored online in an encrypted format, barcoded Wills, even hologram Wills (rather than holographic Wills). What about a Will written on Facebook or whatever Facebook happens to be in 20 years time?

And how about possessions? a Will today allows you to distribute your physical assets and wealth; but won’t a Will of the future need a beneficiary of your blog, your domain names, your Paypal account, and other online assets. Many services are starting to provide for this, and the term “digital Will” is starting to appear, but this is currently separated from your legal Last Will and Testament. There is clearly a gap in today’s understanding of estate planning that glosses over digital assets. By way of an example; if I hold the usage rights to a domain name like sales.com, I never own the domain and I have to renew it every year or so, but I have usage rights all the time I pay my annual fee. As soon as that payment lapses it becomes available to somebody else even though as an asset it could be worth a million dollars. How do I pass this on to a beneficiary?

We’ve spoken in the past about signatures. It is a ridiculously antiquated way of proving that you are who you are. But today, in 2011, it is considered to be proof that you signed the piece of paper. There are all kinds of cryptographic advances being made to make a handwritten signature obsolete and I would be surprised if our children still relied on scratching their name on a sheet of paper to be proof of their identity.

I have similar thoughts about the swearing under oath; today having a signature notarized gives it more “weight”. In other words, if I sign a piece of paper, it was probably me, if I sign it in the presence of a Commissioner of Oaths who makes me swear in the presence of God that it really is me signing, then it really must be me. I really cannot imagine that this will be the most secure approach that we will have in 2031.

There’s clearly more to the signing than just adding a signature; you have to prove that there was no undue influence, that you had mental capacity, that the Will reflected your own wishes and so forth. But the mechanics of writing on a piece of paper and signing it will not work for our children. A Will also has more to its clauses than just a distribution of assets; it names an Executor, Guardians for children, potentially sets up trusts, has alternate plans. There’s probably too much in there for a person to record into a webcam.

This is clearly an area for our futurists to think about, will our children’s Wills be recorded, barcoded, encrypted and stored in the cloud with a copy of their DNA?  if they are, our laws need to adapt a little more quickly.

Challenging a Last Will and Testament

One of the questions we are regularly asked at LegalWills is “can anybody challenge my Will”. And the short answer is yes, but there are very specific reasons how and why a challenge is likely to be successful or not.

It is not uncommon to see news reports of Wills being challenged; a quick internet search brought up this one and this one . The common feature of these two disputes is that they are a claim based on the mental capacity of the testator (person writing the Will). This is perhaps the most high profile reason for a Will contest, but in general there are only a few ways that a Will can be successfully challenged.

Mental capacity: The person making the Will must understand that they are indeed writing and signing their Will. They should understand the contents of the Will but beyond that they should understand the value and nature of their assets, the nature of their relationships (including which family members they have), and the Will should reflect this understanding. They should also be free of any delusions that may influence the distribution of their property. One important note on this one is that it cannot simply be inferred based on an age; a challenger cannot simply say “he was 97, he didn’t know what he was doing”. There must be some evidence that the individual did not have full “testamentary capacity”.

Undue influence: This is different to mental capacity as illustrated nicely by this court case.  In order to contest a will on the ground of undue influence, it must be shown that the testator did something contrary to his or her true desires. It does not have to be shown that the testator was of unsound mind to prove undue influence. It is a matter of coercion and the main reason why a beneficiary cannot be a witness to the signing of a Will. Undue influence is probably very common but a difficult thing to prove; there are also many shades of influence and so successful challenges depend on the court’s judgement and even then can often be appealed.

Improper execution of the Will: This varies by jurisdiction but in general the document must be signed in the presence of two or three witnesses (ignoring for now the special case of holographic Wills which we discussed in a previous post). Of course, a witness cannot be a beneficiary and in most jurisdictions it goes beyond that; a spouse of a beneficiary cannot be a witness or anybody else who is seen to directly benefit from the contents of the Will. Some jurisdictions require an initial on each page to protect against pages being removed and inserted. There are many variations on this theme including multiple Wills being presented, codicils and amendments to existing Wills, handwritten notes appended to Wills and verbal promises.  It is this type of challenge that is most commonly cited as a reason for not preparing one’s own Will, but as we have previously noted, a Will created using a service such as the one at LegalWills is perfectly valid if signed and witnessed appropriately.

Fraud: This can take many forms from the falsification of documents including forged signatures but also includes situations where the testator made a change to the Will based on misinformation given by a beneficiary.

No provision for dependents: This varies widely across jurisdictions but there are sometimes people who have to be included in a Will. In most jurisdictions dependents must be taken care of, and a spouse has a claim to a part of the estate. And of course we saw that in BC, adult children can challenge a Will if the division of property is considered to be unfair.

So of course, anybody can challenge a Will, but challenges are highly unlikely to succeed unless one of these claims can be proven. The most common reason we hear for wanting to challenge a Will is that the testator verbally promised something which was not reflected in the Last Will and Testament. Sadly, this is highly unlikely to result in a successful challenge even though it can be a very emotional disappointment to the people concerned.

It is important to note that a testator preparing their own Will, or using software to create a Will is not a basis of a challenge unless the challenge is based on one of the preceding situations. So the fear of a Will challenge should not in itself be a reason to steer away from a service like LegalWills which helps you to prepare your own Will.