When you’re running through your estate planning checklist, there’s one document that trumps them all: a last will and testament.
This is the one estate planning document everyone knows. And for good reason–it’s the document that specifies how your estate will be distributed after your death.
What many people don’t know is that there are several different types of wills, each with its own benefits (and its own rules). Here are some of the different kinds of wills you might consider, why you might choose each one, and when not to choose a certain type of will.
A Simple Will
A simple will is exactly what it sounds like: a document outlining how you want your possessions distributed after you die. It’s called a simple will because it doesn’t have any extra clauses or stipulations. You can declare:
- How you want your assets given away
- Who will receive your assets
- The personal representative or executor who will distribute your assets
- A guardian for your children, if applicable
Despite the name, you can do quite a lot with a simple will. However, if your estate is complicated, a simple will won’t do the job. Common cases where a simple will is insufficient include:
- You own a business
- Your estate will be heavily taxed
- You’ve been through a divorce or have children from a previous relationship
- You want to set up a trust, including a special needs trust
- You want to leave land to your children
- You have any reason to believe your will may be challenged
When in doubt, talk to an attorney.
A Testamentary Trust
A testamentary trust isn’t a will, but rather a document created as part of your will. Think of it as a will within a will, or rather a trust within a will.
Basically, a testamentary trust holds assets for your beneficiaries and names a trustee to handle the trust. The difference between a testamentary trust and a living trust is that a testamentary trust only springs into effect after you die, while a living trust is formed during your lifetime. Once the trust is created, it remains in effect until a triggering event specified in your will, such as the beneficiary turning 21.
That’s where a trustee comes in. Since the beneficiary cannot access the trust until the triggering event, the trustee has to manage the assets for them.
A Joint Will
A joint will is a type of will jointly executed by two people, typically a married couple. This combines both parties’ last will and testament into one document which takes effect as soon as one party dies.
This is an important feature of joint wills and also the reason why many estate attorneys don’t recommend them anymore. A joint will takes effect as soon as one party dies, not both. This can be used to allow the surviving spouse to inherit everything. After the other spouse dies, the estate passes to the children.
However, most attorneys recommend against joint wills these days because of their inflexibility. One spouse may die years or even decades before the other, but in a joint will, the surviving spouse cannot alter the terms of the will, which can quickly become problematic in the face of life events, like wanting to sell the house or give an adult child their inheritance early.
A Living Will
Despite the fact that they have similar names, a living will is not a last will and testament at all. It has nothing to do with distributing your property after you die.
A living will is intended for when you are still alive. Rather than distributing assets after you die, a living will is used to clearly articulate your wishes for the medical care you wish to receive in the event that you are unable to communicate your wishes. For example, if an unconscious patient has a terminal illness, doctors will consult a living will to determine whether or not the patient wants life-sustaining treatment.
This is important because in the absence of a living will, medical decisions become the responsibility of your spouse or next of kin, and they may be unaware of (or unwilling to follow) your wishes.
A Holographic Will
A holographic will isn’t an invention of science fiction. It’s actually an old type of will that is still occasionally used, usually in extreme cases of life-threatening danger like a soldier going into combat who does not believe they will survive. A holographic will is simply a handwritten will signed by the testator (you) which is not formally witnessed.
We mention this type of will to tell you not to rely on it. The state of Georgia does not recognize holographic wills, and if you rely on one, your estate will go to probate rather than being distributed in accordance with the holographic will.
A Nuncupative Will
Despite the technical name, a nuncupative will is much simpler than it sounds. It’s simply a will that’s been spoken aloud rather than written down. This type of will is usually created if the testator (you) will pass away soon and does not already have a will.
Like holographic wills, rules vary from state to state. Georgia recognizes nuncupative wills only in a time of last illness and only if it can be proven in oath by two witnesses (if the testator explicitly told those present to bear witness that this is their will). The will must be reduced to writing within 30 days.
As a rule, if you want to avoid challenges to your will, it’s best to rely on other options.
Navigating the Different Types of Wills
When it comes to the different types of wills, we’ve found one common feature among them all: when you fail to plan properly, those left behind will be devastated.
Our job is help you plan for your family’s future when you’re no longer there to support them, with years of estate planning expertise and a plainspoken, compassionate approach to help you understand your options.
If you need to speak with an attorney about your options, click here to schedule an appointment.