C. USING A WILL

A Will is the simplest and most traditional method of arranging for the distribution of the things you own at the time of death to the parties you intend to receive them.  Because a Will can include a wide array of plans for the distribution of your property, they can be quite simple or quite complex.  A large portion of the decision here is the question of whether a Will is the appropriate vehicle for the distribution of your property, and, if so, what it should include.

In order to evaluate the desirability of using a Will, it is important to understand what happens at the time of death of an individual. This discussion is generally directed towards the rules in the State of California, but most of the rules apply in other states.

At the death of an individual, it is generally necessary to utilize some method of assuring that the things you own are distributed to the parties who are entitled to them under your Will.  There are certain vehicles which will result in property being distributed independent of the Will provisions.  For example, life insurance is distributed to the beneficiaries of the insurance policy.  Qualified plans and IRA accounts are generally paid to the beneficiaries designated with respect to the plans.  Joint tenancy property may be transferred to a surviving joint tenant without regard to the terms of the Will.  Thus, to make sure that your Will operates in the way that you intend, you need to make sure that you coordinate the direct distribution devices with the plan reflected in your Will.

At the death of an individual with a Will who owns property subject to its terms, it is necessary to have a "probate" proceeding.  This is, essentially, a court proceeding where the court reviews the terms of the Will, the assets owned by the decedent, provides an opportunity for creditors or other claimants to appear in the proceeding, when it is determined that all is well, the court issues an order directing that property be transferred in the manner described in the Will.  Unfortunately, this is a time-consuming and very public process.  In California, a probate normally takes from nine to twelve months from start to finish.  The process basically operates as follows:

     a. After the death of the decedent (the person who has died), the person named as executor files a petition for probate and is
         appointed as an executor.  The executor has the authority to manage the decedent’s affairs during the probate process.

     b. The executor is required to locate and list all of the assets in an "inventory" which is presented to the court.  This
         information is usually public.

     c. Notices must be sent to all creditors of the decedent to give them a chance to make claims against the estate.

     d. The executor may be required to prepare a federal estate tax return and similar state estate tax returns if the size of the
         estate is sufficient.  (See "Federal Estate Tax" .)

     e. The executor will generally be required to file income tax returns for the decedent.

     f. The estate itself will generally be required to prepare and file a separate income tax return.

     g. When all activities have been appropriately completed in the probate administration, the executor provides a comprehensive
         report to the court in the form of an accounting and petition for final distribution.  The court reviews the activities of the
         executor during the administration of the estate, and finally issues an order directing that property be transferred in the
         manner specified in the Will.

This is obviously a very involved and expensive process, and one that many people attempt to avoid by utilizing a Revocable Living Trust or other non-probate alternatives.  See discussion of "THE USE OF A REVOCABLE LIVING TRUST”.  Despite these administrative difficulties, the use of a Will of one type or another is the most prevalent estate planning vehicle, and has been for many centuries.

For many individuals, the use of a Will is the most effective method of accomplishing estate planning.  The Will is basically designed to address a series of issues which, in an oversimplified manner, are basically as follows:

1. At the time of your death, who do you want your property to be distributed to?

2. What person do you want to assist in the paperwork or management responsibilities related to the finalization of your affairs
    and ultimate distribution of your assets?  This will be the person you will identify as your executor.

3. Are there any particular terms or conditions that you want applicable distribution of your property?

4. If you have children, who do you want to assist in raising your children and in managing your property for their benefit, and
    how do you want this done?

Each of these topics are discussed in greater depth in other portions of this overview.

For a more detailed discussion of these issues, please refer to the publication entitled "DO I NEED A WILL?" published by the California State Bar Association, which is reproduced at Appendix III.