How Wills Work

Drafting a will is a lot easier than most people think. Having an attorney draft or review the will is a good idea, but it's not necessary in order to make it legal and binding.

State law applies in the case of wills, and each state has different rules. When drafting a will, it's important to research your state's laws. Most states require that the will be signed by the testator and at least one witness. Here's some basic information that most states require in order for wills to be valid:

Burial instructions are often included in a will, but it's generally a good idea to have them written up in a separate statement that can be easily accessed. Imagine the difficult spot your family would be in if your burial wishes were locked in a safe or difficult to find.

Pension plans, life insurance policies and annuities should not be in the terms of a will. Those benefits are passed directly to the beneficiary named in those documents. You can name your estate as the beneficiary of these assets, but doing so can lead to delays in the execution of the will or create tax disadvantages.

Probate court rules whether or not a will is valid based on a few important details. Most states require that you be at least 18 years old. All states require that you be of sound mind. While some members of your family may doubt this from time to time, legally speaking, it means you are:

These requirements apply only at the moment the will is drafted. If someone creates a will and later falls into mental illness, the will still applies.

The executor, or personal representative, is the most important person named in the will. He or she gathers and makes an inventory of all personal property, pays the deceased person's legitimate debts and distributes the assets under the terms of the will. The personal representative can be anyone -- a family member, close friend or personal attorney. He or she should be someone that you trust implicitly. It's also a good idea if the executor has some business experience and is intelligent and thoughtful. Serving as executor and dealing with grieving families is never an easy task. Most testators name an alternate in case the first choice for nomination isn't able to perform the required duties. If you don't name an executor, probate will appoint one, typically one of your heirs.

In the next section, we'll learn about the different types of wills and how they function.

There are several different types of wills that are recognized as legal and binding in probate. Oral wills are spoken to a witness instead of written down. This type of will is common when someone feels like there isn't enough time to draft a document. Many times, armed service members in active combat will make an oral will, witnessed by their fellow soldiers. This situation is one of the more common ones that a probate court will recognize as legitimate in cases of oral wills. As you can imagine, there is great opportunity for fraud and misinterpretation of oral wills. They aren't recommended.

If you're faced with certain death, you might draft a deathbed will. While they can be binding, these wills are more difficult to prove legal and are the most common wills to be challenged. People often challenge deathbed wills on the grounds of the mental capacity of the testator, with the argument that the individual can't be of sound mind when facing imminent death. A deathbed will is also commonly filled with errors because of how fast it's made. Even if mistakes aren't made, possessions can be overlooked, leaving them to be divided by the court.

Holographic wills are informal and typically handwritten. Not all states recognize holographic wills as valid. States that do allow holographic wills have specific laws that must be adhered to. Holographic wills must be signed by the testator, and it's best if they're witnessed and signed by another person. As with the deathbed and oral variety, holographic wills are commonly made when something unexpected and tragic happens. A person trapped or lost in the wilderness or alone and near death may write a holographic will. In these cases, there is no witness, and it would be up to probate to rule on the will's validity.

If paying a lawyer seems like an unnecessary expense, you can always use a form book or Web site to help draft a do-it-yourself (DIY) will. The numerous guides to creating your will can be very helpful, but it's still important to do follow-up research on your state's regulations and possibly have an attorney go over the will to make sure it's legal. Many people make the mistake of assuming the fill-in-the-blank forms or Internet Web sites are foolproof and once they're deceased, it's too late to do anything about it. Getting an attorney's stamp of approval on your DIY will is still less expensive than hiring a lawyer to draft it for you.

When speed of execution is important, self-probating wills can be a real time saver. When the will is created, witnesses sign sworn statements that verify the will was created and signed in their presence, and that the testator was of sound mind at the time. Without these statements, the witnesses must be contacted by the executor and are usually required to appear in probate to provide in-person testimony before the will can even be filed. As you can imagine, this can draw out the entire process and create stress on your family. Self-probating wills that are drafted with the aid of an attorney are the most solid and least likely to be successfully challenged.

Wills can be, and often are, contested by family members of the deceased. We'll look at that process in the next section.

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It's perfectly legal for wills to be changed. Circumstances often change after the initial will is drafted, and it's up to the testator to make sure that the final will goes along with his or her wishes. The testator is the only person legally allowed to change his or her own will.

Most changes to wills are commonplace and easy to make. Some reasons you may want to change your will are if you have a baby or get married or divorced. You may also want to change your will if your executor or beneficiaries die, tax laws change in your favor, or if there's a considerable change in your assets.

Aside from these reasons, there's always the case of a testator that wishes to make major changes in how his or her assets are divided. A family member might fall out of favor, or the testator may simply feel philanthropic and decide to give his or her money to charity.

In order to change your will, you can either draft a new one that revokes the previous will, or add a codicil to the existing will. The codicil is a separate document that legally amends the existing will. These days, attorneys are able make changes in the computer file so the will can be updated with minimal cost attached. Changes should be executed by a professional to guarantee that they're accurate and binding.

Wills can be contested in probate, but only by persons of legal standing. The laws for legal standing vary by state, but it typically means an individual either included in the will, or one that should have been included in the will. Wills can't be challenged on the grounds of the fairness. They're usually challenged for the following reasons:

Wills can be found partially or fully inadmissible in probate. If the will is fully rejected, it's thrown out and the court gives away the assets as if the deceased died without a will. If partially rejected, probate abides by certain requests and rules on the others. Contesting a will is a very expensive, long process and as long as the will was drafted under the legal terms of the state, the challenge is seldom successful.

In the next section, we'll look at some more components of a last will and testament.

Disinheriting a family member in a will is more common than most people think. In order to prevent your children from receiving assets from your estate, you must legally disinherit them by saying so your will. If the child is a minor, state laws will usually provide them with an allowance from the testator's assets until they reach the age of 18. Spouses are much more difficult to legally disinherit. Unless there's a prenuptial agreement that stipulates such action, all states prevent spouses from being completely cut off in a will. The set share for surviving spouses in most states is one-third to one-half of the assets. Attorneys generally discourage testators from attempting to cut a family member out of a will completely. Instead, they might advise their client to leave a small amount and include an in terrorum clause that prevents the beneficiary from receiving any assets if the will is contested.

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Divorce can also complicate the terms of a will. In some states, divorce immediately makes the current will invalid. In others, only the parts of the will that apply to the spouse are revoked. No matter what state you live in, if you get a divorce, it's important to review the impact it has on your will.

Dying without a will, known as dying intestate, is a common occurrence. In all cases, probate appoints a personal representative to be in charge of your assets. This administrator acts as executor, pays all debts and inventories assets of the estate. The inventory is then turned over to the state and divided according to state law among the beneficiaries.

A lost will is another problem many families face. The specific circumstances and state laws determine the outcome in these cases. If there's an earlier will that was in the process of being revoked, sometimes the initial will is used. Photocopies of the will can be accepted in the case of wills lost by fire or other destruction. Wills should always be kept in a safe place, either a safe deposit box or home safe. It's also smart for your attorney to retain a copy.

If your will was properly drafted in one state, it's generally valid in another state, but it's wise to have it reviewed by an attorney. In some cases, the tax laws in your new state may favor your estate, so it can be financially advantageous to change the will.

Estate taxes are federal taxes that must be paid by the beneficiaries of the estate. The amount of money owed is established as a base amount, plus a percentage of the overall taxable estate. For instance, in 2006, if the taxable estate is more than $10,050, the estate tax would be $2,596, plus an additional 35 percent over and above $10,050 [source: IRS]. As you can see, estate taxes are hefty, and most wealthy people use various loopholes, tax shelters and trusts to prevent their beneficiaries from having to pay so much. Debate is non-stop on so-called death taxes and will continue as long as the Internal Revenue Service (IRS) demands such large percentages. Estate tax law is very complex. More information about the current laws can found at the IRS Web site.

In the next section, we'll take a look at living wills and why they're important.

The term living will is somewhat misleading, as it has nothing to do with personal property or assets. Living wills are documents that outline a person's health care wishes in case of a severe injury or illness. They've become increasingly popular over the years as medical technology has achieved the ability to keep terminal patients alive for indefinite periods of time.

As with a last will and testament, the laws that govern living wills vary from state to state, and it's important that they're drafted with this in mind. The terms for life-threatening conditions are very specific, so a great deal of time should be invested in researching them. If not, the will can be challenged by family members who want to see their loved one kept alive at any cost.

Living wills are required to be signed and witnessed, and a power of attorney is commonly included in case the terms of injury or illness aren't covered. In this case, the person designated power of attorney, typically a spouse or parent, has the right to decide whether or not to keep their loved one alive or to "pull the plug." Many people don't wish to be kept alive by artificial means at the monetary expense and mental anguish of their families. Many people would prefer to be kept alive no matter what. In either case, it's very important that you draft a living will so your wishes are honored. There are simple DIY forms on the Internet for each state that can be filed for little cost. You can read more about living wills in the HowStuffWorks article How a Living Will Works.

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In the next section, we'll take a look at some of the most famous and outrageous wills people have made.

Testators are allowed by law to leave anything they own outright to any person or organization they desire. There can also be stipulations in the will that the beneficiary must satisfy in order to receive assets. For instance, you can bequeath a portion of your estate to one of your children with the stipulation that he or she must quit smoking or earn a college degree. People have navigated these wide-open parameters in a lot of different directions, resulting in some truly outrageous wills.

Portuguese aristocrat Luis Carlos de Noronha Cabral da Camara picked 70 random strangers from a Lisbon phone book 13 years before his death and made them his sole beneficiaries. The people were not notified until after his death, leading many of them to believe they were being conned [source: BBC].

Sometimes, people have stipulations that allow them to accomplish in death what they couldn't in life. McNair Ilgrenfritz, a wealthy but unsuccessful composer, left $125,000 to the New York Metropolitan Opera House -- if it agreed to stage an opera he had written. Unfortunately, the Met declined the generous offer, even though they found that the music was workable [source: BBC].

Occasionally, beneficiaries have luck on their side. Onni Nurmi, a Finnish businessman, left 780 shares of a rubber boot company to the residents of a nursing home in Finland. That company later became cell phone giant Nokia, and the residents of the nursing home became millionaires [source: AOL Finance].

Pets often get special treatment from beyond the grave. While a testator can't bequeath assets directly to a pet, there are ways of ensuring their comfort long after you're gone. "Queen of Mean" Leona Helmsley did a not-so-mean thing when she set up a $12 million trust for her dog Trouble. Sadly, two of her grandchildren received nothing at all [source: Associated Press]. Singer Dusty Springfield had a clause that a bequest be used to purchase a lifetime supply of her cat Nicholas' favorite meal -- imported baby food. It also called for Springfield's nightgown to line Nicholas' bed and for her music to be played for her special feline each evening [source: AOL Finance].

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Some people are so close to their work that they decide to become part of it -- literally. Ed Headrick, an inventor at the toy company Wham-O, is credited with perfecting the design for the modern Frisbee. Ed was so enamored of his accomplishment, he requested that his ashes be molded into memorial versions of the disc and that the money from their sale be used to open a Frisbee museum. Marvel Comics writer Mark Gruenwald's will called for his ashes to be mixed with ink and used within the pages of a comic book. 4,000 "ink and ashes" issues of Squadron Supreme were produced after his untimely death at 42 [source: AOL Finance].

Then there's the curious case of the Shavian Alphabet. Irish playwright George Bernard Shaw famously included a contest in his will that called for his fortune to be given to the person that successfully created a new English alphabet. The stipulation was that the alphabet be entirely phonetic and not Latin-based. Shaw contended that Latin was not a good language for translating English, leaving us with too many unusual word spellings. The Shavian Alphabet would have no less than 40 characters, each one corresponding to a sound. An Englishman named Kingsley Read shared the prize money with four other contestants among 400 entries [source: Omniglot].

You can find more information on wills and related topics on the next page.

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