A Last Will and Testament is more commonly known simply as a “will”. This is a document that controls the disposition of your property… the physical things that are in your name or your possession at the time of your death.
A will does not speak to life insurance, retirement benefits, trust assets or jointly owned property. All of these things have their own processes and designations. For example, life insurance and retirement benefits each have beneficiaries that are assigned when the accounts are set up. Unless otherwise specified, any jointly owned property simply stays with the remaining owner(s) after death. Property named in a trust passes in accordance with the terms of that trust.
There are a lot of things that a will may not cover, but there are plenty that it does. Just as with a Living Will, a Last Will and Testament appoints an Executor to administer the estate, pay final expenses, and distribute the assets. It’s important to choose someone with a bit of financial experience, who can be professional and impartial. This person should also be trustworthy and have some administrative or management experience.
Why choose someone with all of these qualifications? Because the local courts can vary in terms of involvement and complexity. Upon a person’s death, the will is submitted to the local court to oversee the administration of it. Ensuring that any creditors are protected and distributing the assets in accordance with the terms you’ve set forth, could get a bit involved for the Executor. They’ll need to keep their finger on the pulse of all of this, so it’s important that they’re up to the task.
In order for a will to be valid, the person writing it must be “of sound mind and body”, meaning they have basic competency. They are aware of what they are signing, and aware of what will transpire after their death.
It’s very important to note that a Last Will and Testament is not the same as a Living Will. A Last Will and Testament addresses the disposition of your assets, the things you own, after your death. A Living Will addresses you, and your physical body. Both documents are necessary to ensure proper handling of your estate and your medical wishes.
As Certified Medicaid Planners, many estate planning terms and documents are very familiar to us. If you’re in the process of planning for the long term care of a loved one, we can help demystify some of this for you. We can help you move toward a plan that addresses all aspects of this important time. With the right documents in place, this next phase can be one of confidence, knowing all the important questions have been asked and answered.