Last Will and Testament with casebook

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Think for a moment about what “last will and testament” means to you. Maybe the term reminds you of a movie with a widow dressed in black, perhaps wearing a black veil. You may think about a deceased person’s family gathered at a lawyer’s office to hear what inheritance they can expect. Best-selling authors and Hollywood directors of squeezed miles of print and film out of the “reading the will” scene, but a last will and testament can serve many important functions beyond a mere laundry list of wealth distributions.

A last will and testament (often referred to as a “will”) is a specially designed document that a person (the “testator”) may use to appoint a personal representative (sometimes called an “executor”), who will follow the requirements of the will after the testator’s death. A will usually requires the personal representative to use the testator’s assets to pay the testator’s debts, and then distribute the testator’s remaining assets to beneficiaries named in the will.

A will can accomplish more things than most people realize. For instance, a will can divide separate assets among multiple beneficiaries, or require beneficiaries to share one-of-a-kind assets. Wills routinely provide protective provisions to help youthful and disabled beneficiaries receive financial benefits while protecting those financial benefits from youthful indiscretions and claims from beneficiaries’ creditors.

Wills also play highly specialized roles within asset protection estate plans. Some estate plans feature irrevocable trusts that people create to protect important assets like farmland from taxation or rising health costs by transferring assets to the trusts and restricting the transferors’ rights to access the trusts’ assets or change the trusts’ terms and conditions. An irrevocable trust provides no asset protection if the transferor can change the trust during the transferor’s lifetime, but the transferor can reserve the right in the trust document to revise the trust after the transferor’s death with a technique known as a “testamentary power of appointment.” For example, if a person reserves a testamentary power of appointment in an irrevocable trust, and then a beneficiary becomes permanently disabled in a car accident, the trust’s creator can add a provision to her will to modify the irrevocable trust with enhanced protective language for the disabled beneficiary’s benefit.

A married couple can improve their chances of passing a legacy to the children with specialized wills even if the husband or wife eventually requires nursing home care. If one spouse dies leaving a will with a special kind of trust known as a “testamentary trust” for the surviving spouse, the testamentary trust can hold assets to benefit the surviving spouse without exposing the assets to the surviving spouse’s nursing home expenses. This estate planning technique does not work in every case, but it can increase the likelihood of protecting assets for the family in most cases.

Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and active members of the Indiana State Bar Association and National Academy of Elder Law Attorneys. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois. Jeff is also a registered civil mediator, a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation;  a member of the Illinois State Bar Association and the Indiana Association of Mediators; and he was the 2014-15 President of the Indiana State Bar Association.

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