The foundation of an estate plan is a Last Will and Testament, or simply a Will. A will’s most basic function is to direct how your property is to be distributed upon your passing. Although this is the most important and understood function of a will, a will can also do many other things—name an Executor for your estate, propose guardians for your minor children, and even create trusts for your family and loved ones. It is important to understand how a will accomplishes these objectives, as well as understanding why planning for these situations is essential.
- Distributing your property. When a person makes a will, they are able to provide exactly how they want the assets of their estate to be distributed, and to whom they want to receive those assets. However, if someone passes away and failed to execute a will during their lifetime (referred to as “dying intestate”), it is the State of Tennessee who is given the power to decide how your property is distributed. Tennessee has “Intestacy Laws” that provide how your property will be divided. The way Tennessee divides up and distributes your property, is likely not how you would want your property to be distributed. A person can avoid all of this by simply laying out in a will where they want their assets to go.
- Naming an Executor. An Executor is someone named in the will who is responsible for carrying out the affairs and wishes of the deceased person. This is a very important role, and is generally given to someone that the deceased person finds to be responsible and trustworthy–someone that they believe will carry out his/her last wishes. If someone passes away without a will, thereby failing to nominate an executor for their, then any family member can ask the court to be appointed to serve in this role—even someone the deceased person would not want/trust to serve in this position.
- Proposing a Guardian. If you have a minor child or children, it is crucial that you have a will for the purpose of proposing to the Court who you would want to take care of your children should you pass away. Although any proposed guardian would not automatically become your children’s guardian, it provides helpful guidance to the court (who ultimately decides) on who you find to be the most suitable for raising your children should you pass away while they are still minors. If someone passes away without a will, thereby failing to nominate who they wish to serve as Guardian for their children, the court could ultimately appoint someone who you would not want to serve as your children’s Guardian.
- Creating Testamentary Trusts. Another important function of a will is the ability to create trusts within your will (referred to as Testamentary Trusts), which allows for one to create a more specialized distribution scheme in certain situations. One common testamentary trust that Batson Nolan includes in many wills is a Minor’s Trust. This allows for one executing a will, to provide a certain age at which a beneficiary can receive their inheritance—as opposed to receiving it all at the age of 18. For example, many clients like to create Minor’s trust whereby their children would receive their inheritance only after attaining the age of 25. Additionally, one can structure their Minor’s trust to only distribute half of the child’s inheritance to them at the age of 25, with the other half being distributed at the age of 30. Other common testamentary trusts at Special Needs Trusts, as well as Dynasty Trusts.
As you can see, wills are not only important for directing how your property will be distributed when you pass away, but is also crucial for planning out many other aspects of your estate plan. If you own any assets or have minor children, it is critical that you have a well-drafted will. Contact Batson Nolan and set up an appointment with our Estate Planning team, so that you can ensure your estate is adequately planned to carry out your final wishes.
Call (931) 647-1501 to plan your estate today!