A last will and testament can be a very powerful legal document. It has the potential of disposing of all of your property after your death. A Will could control tens of thousands dollars or even millions of dollars of assets, depending upon the worth of the deceased person. On the other hand, a Will might control nothing. It depends on what assets the decedent owned and how those assets were titled.
A Will is only an effective document after the person who made the Will dies. During his life, his Will has no effect at all. A person can always change his Will until the day he dies. This is why we call it the “last will and testament.” The only important Will is the last will that the person made before he died. All prior Wills are meaningless.
If a person dies without any assets, then his Will won’t control any assets. Sometimes, a client of mine will be a recipient of Medicaid benefits and his family will say something such as “Dad doesn’t have a Will. Does he need one?” If dad is receiving Medicaid benefits, then he would have to own less than $2,000 in assets. So, he might need a Will, but his Will isn’t going to control many assets.
There are non-financial aspects of a decedent’s affairs that can be controlled through his Will. For years, I have nominated a funeral agent in my clients’ Wills. This is a person with authority to direct the funeral arrangements for the deceased person. This could be very important if there is a dispute as to how the deceased would like his remains handled. Funeral directors like it if there is a nominated funeral agent, so I have nominated a funeral agent in my clients’ Wills to handle this situation.
A Will may or may not control the decedent’s assets. It depends on how the decedent titled his assets. When a person dies, his assets pass in one of three ways—by operation of law, by contract, and by probate. If all of person’s assets pass by operation of law or by contract after his death, then his Will won’t control how any of his assets pass.
An example of property passing by law is when a husband and wife own their home jointly. When a husband and wife own a home jointly, they own it as joint tenants with right of survivorship. This means that when one spouse dies, the other spouse becomes the absolute owner of the entire property. Nothing needs to be done to effectuate the vesting of absolute ownership in the surviving spouse. The property passes to the surviving spouse by operation of law.
An example of property passing by contract is a life insurance policy that names a beneficiary. When the insured dies, the insurance policy pays out to the named beneficiary. The contract, the life insurance policy, controls who will receive the proceeds of the insurance when the insured dies.
A person might die with nothing but property that passes by operation of law or by contract. Typically, when the first spouse dies, his Will doesn’t have to be probated because everything passes to the surviving spouse in one of these two ways.
On the other hand, a Will might control some of the decedent’s property or all of the decedent’s property. For this reason, a Will can be very important. In fact, in my opinion, it is wise to ensure that some of your property passes under your Will because you need to leave your executor with some assets with which to pay your final debts—funeral expenses, medical expenses, credit card bills, and utilities for your house. Without any assets, your executor can be left in the unseemly positon of having to beg or to sue the individual who received your assets by operation of law or by contract in order to pay your debts.