WHAT IS A WILL?

A will is a direction controlling the disposition of property at death. Each state sets the formal requirements for a legal will. In North Carolina the following stipulations apply:

You, the maker of the will (called the testator), must be at least 18 years old.

You must be of sound mind at the time you sign your will and not subject to the undue influence, duress, or fraud of another person.

Your will should be written. Some types of property can be given orally, but only by a person in his or her last sickness or in imminent peril of death.

Your will must be witnessed in the special manner provided by law for wills.

You must follow exactly the formalities required for the execution of a will.

Your will must be admitted to probate by the clerk of Superior Court.

In North Carolina you can have a will that is entirely in your own handwriting—a "holographic" will. Before preparing such a will, however, you should at least obtain legal advice to be sure you correctly incorporate your wishes. A will does not become final until the death of the testator. It may be changed or added to by the testator by drawing a new will or a "codicil," which is simply an addition or amendment executed with the same formalities as a will.

WHO SHOULD PREPARE A WILL?

No sensible person would employ just anyone to fill teeth, take out an appendix, or deliver a baby. The person who wants these services performed skillfully with the minimum risk to health, life, property, or the accurate execution of his or her wishes will engage the services of a trained professional.

The drafting of a will requires professional judgment that can be obtained only by years of training, experience, and study. Only a practicing lawyer can avoid the innumerable pitfalls and advise the course best suited for each situation.

WHAT CAN A WILL ACCOMPLISH?

When you make a will, you accomplish several important things:

A trust may be created in a will whereby the estate or a portion of the estate will be kept intact with income distributed or accumulated for the benefit of members of the family or others.

The expense of bond premiums, often required of the person managing your estate if there is no will, can be avoided.

You may name anyone executor of your will, provided the person named can qualify under North Carolina law. An executor is one who manages an estate and may be either an individual or a bank or trust company, subject to certain limitations.

Minors can be cared for without the expense of guardianship proceedings.

Real estate and other assets may be sold without court proceedings, if the will adequately authorizes it.

You decide who gets your property instead of the laws making the choice for you and you can make gifts to charity effective at or after your death.

WHAT HAPPENS IF THERE IS NO WILL?

If the deceased has no will (or dies “intestate,” as the law calls it):

The real and personal property of the deceased is distributed according to a formula fixed by law. In other words, if you fail to make a will, the inheritance statute determines who gets your property, not you. The laws of descent are a rigid formula and make no exception for those in unusual need.

The court appoints a personal representative to manage your estate. Usually the representative is a member of your family; however, it could be someone who is unknown to you. The cost of distributing your assets may be greater if you do not plan your estate with a will.

MAY A PERSON DISPOSE OF PROPERTY IN ANY WAY DESIRED BY A WILL?

While any sort of property may be transferred by will, there are some particular interests in property that cannot be willed because the right of the owner terminates automatically upon death. Some examples of these types of property rights or interests are:

Entireties: property that is real estate owned by a married couple known as “entireties” property.

A life estate: property owned only for the life of the owner.

Any property owned jointly with another person or persons with right of survivorship (a tenancy by entireties that is limited to joint ownership between a husband and wife would be one of these).

Any life insurance policy or annuity payable upon death to a beneficiary who must be named during the owner’s lifetime. Owners can, however, during their lifetime name their estate as the beneficiary.

You cannot disinherit a spouse. The law gives a surviving spouse a choice to take his or her share under the will or to dissent from the will and take the share provided by law. However, it is possible to disinherit any or all of the children.

THINGS TO KNOW ABOUT WILLS

Must children be provided for in the will?
No. This popular misconception arises from the fact that when a will fails to make provision for, or "remember" a child, the law "presumes" that the testator merely forgot, and the "forgotten" child may have rights in the estate. To avoid such an outcome, the drafter of a will frequently would state, "To my son John, the sum of one dollar." Today, an accepted provision is "I have intentionally made no provision for my son John." Children born after a will is signed may still have certain rights in the estate under particular circumstances.

How long is a will valid?
It is valid until changed or revoked in the manner required by law. A will may be changed by the testator, who must be of sound mind and not under undue influence, duress, or fraud, provided it is changed in the required manner. Changes in circumstances after the execution of the will, such as tax law amendments, deaths, marriage, divorce, birth of children, or even a substantial change in the nature or amount of a person’s estate, may raise questions as to the adequacy of the will. Such circumstances require a careful analysis and reconsideration of the provisions of a will and may make it advisable to change the will to conform to the new situation.

Does a will increase probate expenses?
No. If there is property to be administered or if there are taxes to be paid or both, the existence of a will does not increase probate expenses. A will frequently reduces expenses, including legal fees. If there is real or personal property which would pass by will or descent, the probate court has jurisdiction and must either rule on the will or determine the legal heirs. Thus, even if you have no will, your heirs must go to court to administer your estate or obtain a determination that administration is unnecessary.

What is an estate by entireties?
An estate by entireties may be defined as a form of joint ownership of real or personal property by husband and wife with right of survivorship. Such an estate always involves a gamble as to who dies first. The most that can be said is that in some cases, and for certain kinds of property, an estate by entireties may be a useful legal device in addition to a will. Countless problems can arise from the indiscriminate use of this device by unskilled persons. Estates by entireties should be created with a great deal of care. When one owner dies, the survivor becomes the sole owner of all the jointly owned property, thus creating a potential tax problem for the survivor.

Is a life insurance program a substitute for a will?
No. Life insurance is only one kind of property that a person may own. If a life insurance policy is payable to an individual, the will of the insured has no effect on the proceeds. If the policy is payable to the estate of the insured, the disposition of the proceeds may be directed by a will. The careful person will consult a lawyer, a life insurance counselor, and a financial advisor.

Can a will reduce taxes?
We live in a tax age, and the foreseeable future suggests no material change. In our everyday lives, we can make business or personal decisions that help reduce our taxes. After death, however, little can be done by an executor to relieve an estate from burdensome taxes resulting from a poorly-drawn will or no will at all. A well-drawn will can reduce inheritance taxes significantly. Every person who owns more than a home has an estate that could have tax problems.

SOME THINGS TO CONSIDER BEFORE MAKING YOUR WILL

Marriage does not cancel a will in North Carolina, but a spouse married after the execution of a will may receive the same portion of your estate that he or she would have received had you died without a will (one-third in most cases). If the testator is divorced or separated after the execution of a will naming the former spouse as a beneficiary, the divorce or separation abolishes that spouse’s right to benefit under the will if there has been a property settlement between the spouses.

If you have moved to North Carolina from another state, it is wise to have your will reviewed by a lawyer to be sure it is properly executed according to the laws of North Carolina. Also, it is important that the witnesses have properly attested to the will before a notary public or are readily available to prove your will in North Carolina and that your personal representative, or executor, is qualified to serve in this state.

No matter how perfectly a will may be prepared for you, unless it is properly executed in strict compliance with the laws of North Carolina, the will may be entirely void. Be sure you execute your will in the presence of an attorney who knows exactly how and in what order the will should be signed.

Every person owning property who wishes to exercise control in the disposition of that property upon death should have a will regardless of the value of the property. Of course, the larger the estate, the greater the tax consequences.

Many articles have been written about a formal proceeding called the "reading of the will." According to popular belief, this happens in the lawyer’s office. However, most lawyers keep only a copy of a will because they may have no way of knowing when the maker of the will dies. The original will is normally kept in a safe place by the person making the will, which is later found by a member of the family or a person aware of its location. That person usually does not wait for a formal reading.

A will is personal, and no one is entitled to know the contents, not even those persons who sign as witnesses on behalf of the maker of the will. Of course, the maker of the will should advise someone that he or she has made a will and describe its location so that it can be found upon death.

When someone dies, the person who finds the will should take it to the office of the clerk of Superior Court in the county where the deceased person lived. The will is then given to the clerk of court, who may ask the witnesses to sign a statement that they saw the testator sign the will.

A will is not effective until it has been approved by the clerk of court and recorded. This usually happens several days after the funeral of the person making the will. Because of this, a will is not a proper place for funeral instructions. A person desiring special funeral arrangements should make those arrangements in advance with a funeral director.