Wills

This page was last updated on July 28, 2003.

I. WILL

    A. What it is?

    A Will is a document that directs where you want your estate to go when you die.  Your estate is basically all that you own when you die. As you will read about later, the Will only controls your estate.  Some items are not included in your estate because when you die, the ownership of these items instantly changes making it so you don't own them at death.  Despite the immediate change in ownership, you may still be taxed on these items.

    The person making the Will is a testator if it is a man and a testatrix if it is a woman.  When the Will is signed before two witnesses and a notary, then the Will has been executed.  The people who receive something under the Will are generically known as heirs.  The people who receive something from your estate if you did not have a Will are known as heirs-at-law.  The person who takes care of the estate after you die is know as the executor if it is a man, or executrix if it is a woman.  If you do not have a will the person who takes care of your estate is the administrator or administratrix.

    B. One Will to a customer and one customer to a will   

    A will discusses only one person's wishes.  Some married couples believe they have joint wills.  This is not possible or rather not legal.  What the couple probably has are two (2) wills, and each will says that one spouse leaves everything to the other spouse.  These types of wills are often referred to as "I love you wills".  Both spouses, however, have their own separate will.  Each person needs their own will.

    To make a will you must be over 18 and be of sound mind.  There is a very low test for sound mind (even I can pass this one.  If you have read this far, you probably have passed it, too.)  In the simplest terms, the test is that you know what you own and the objects of your bounty, in other words who your close relatives are.  You don't have to leave it to them, you just have to know who the are.  If you or rather someone you are reading this for, is not of sound mind then there must be a power of attorney for that person.  (Click on powers of attorney for that page.)

    You can change your will by signing a codicil.  The codicil must be signed under the same formalities as a will signing which is

    C. Estate Taxes

    Massachusetts Residents should be concerned about two different typed of estate taxes, State and Federal.

    The State Estate taxes begin with an estate worth $700,000 in 2003.  Remember an estate includes more than you think.  You estate will include part of the value of your home.  If your home is worth $500,000 and you and your spouse own it together, your estate will include one half (1/2) the value of that home or, $250,000.   There is also a good chance the value of any life insurance policies you have will be included in your gross estate.  Your taxable estate includes many things that are NOT in probate.  So even by avoiding probate, you do not avoid taxes.

    The Federal Estate taxes begin at $1 million dollars in 2003.  This amount increases over the next few years. 

    With proper planning married couples can effectively double the amount of money they can leave tax free.  In other words, a properly planned for estate can leave $2 million dollars at the Federal Level tax free and $1,400,000 tax free at the state level.  (This also assumes you have $2 million dollars to leave.)

    D. Probate

    This is not quite the scary monster you have been led to believe.  See Estate Administration for more information.

    E. What is this going to cost?

    Hopefully, less than you think.  These prices are per person.  So if you and your spouse are each getting one, you need to double the price. 

    A simple will with no tax considerations is currently $250.  So a husband and a wife each need their own will, this means it is $500 for the couple.  This price may increase on October 1, 2003.

    Most information about Trusts is on the Trust page.  There is however a smaller trust that many parents of young children choose to have in their trust.  It is known as a testamentary trust.  This trust is created in your will.  It does not actually exist until you die.  There is nothing in it until you die.  You can change it right up until you die.  Without this trust your children would get the money outright when they turned 18.  A scary thought for most people.  Most parents want the money to be available for college or post high school education and for the children to get a good start in life.  This is accomplished with a testamentary trust.  It is a little trust in your will that appoints someone to watch the money until your child is whatever age you choose (most pick 25) and that prior to the child turning 25 the money should only be used for whatever purposes you choose (most say education).  A testamentary trust is $100 on top of the $250 for a will.   This makes the total for a will with a testamentary trust $350. This price may increase on October 1, 2004.