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A last will and testament is a legal document that communicates a person’s final wishes pertaining to possessions and dependents.
What should be in a Will?
These are the basic things you should include in your will.
A paragraph declaring this to be your Last Will and Testament. Some words to say this Will revokes all prior wills.
Your spouse’s or significant other’s name and relationship even if estranged.
Your children’s names (even if disinheriting) and dates of birth. Specifically disown any children you want to disown. A list of the people who will get your stuff and how much they get. If you forgot anything in the specific gift list, a catch all to distribute the rest.
In case of a family emergency, in which you have no descendants, to whom the remainder will be left. Often this is a charity.
You should not just do a will yourself. There are legal things you may not know or think about. For example, restricting the right to marry is a Constitutional issue. You can use an online program to help you generate a will. But, I have seen the results and that people forget to sign ALL of it. Also, many of the stand alone and online programs cannot give legal advice. You are at the whim of what questions they ask.
Why have a Will if I have a Trust?
The will shall simply “pour over” anything that was not put into the trust, into the trust.
For example, you sell a home, and buy a new home. But you forget and don’t title the new home in the name of the trust. However, the will shall catch the home and put it in the trust.
It still has to go through probate, but it should be a short and simple process.
In a trust based estate plan, the role of the Will is to act as a “catch all” for anything not titled into the trust. If everything is in the trust, the Will would not have a purpose or roll in an estate plan.
How can a Will affect Medicaid?
Oh boy. It takes an example to show you how the reciprocal (“I Love You”) Will can affect Medicaid.
First, we need a married couple. Their names are Husband Harry(H) and Wife Winnifred(W).
Second, we need Wills. H’s Will gives everything to W. W’s Will gives everything to H.
Third, W needs Medicaid. H&W move assets around as allowed, and get W qualified and on Medicaid. H owns a good deal of the couple’s assets now.
On the way for his daily visit to see W, H gets hit by a bus (meteor, lighting, etc.) and dies.
H’s Will gives everything back to W. Now W has assets in excess of what W is allowed to have. W just became disqualified for Medicaid until W spends down to her $2,000 (as of 2016) asset limit.
What is the difference between a Living Will and a Last Will and Testament?
A Living Will is a medical wishes document. It spells out what care you do and don’t want if you can’t make your own medical decisions, are permanently unconscious or the end is near.
A Last Will and Testament goes to work after you pass.
If you think your children don’t have creditors, think again. Do they have credit cards, a mortgage, or anybody else they owe money to? If so, they have creditors.
If they default on the credit (loan), then the creditors will try to come after any money they have. That includes inherited money and current money.
To protect them against creditors, the money and home can stay in a trust that has “spend thrift” provisions to keep the creditors from attaching to the principal in the trust.
Also, this is a good time to mention not putting your children on your bank accounts. The reason is the same, their creditors can reach through and get your money. Financial predators can reach through and get your money.
Can I protect myself from financial predators and creditors?
Don’t put your children on your accounts.
If a child defaults on credit, the creditor can look to the account you put your children on. A durable power of attorney is a much better way to give them check writing authority. Co-trustee on your trust is another way.
If a financial predator gets your children’s financial information, they could reach through into your account and drain your money out too.