A person’s Last Will and Testament is a product of that person’s free will. In other words, the person who makes the Will voluntarily agrees to the terms of the Will. That’s why we call these documents Wills.
If a person signed a Will that wasn’t the product of their free will – in other words, someone else thought up the terms of the Will and compelled the person who was signing the Will to sign it – it wouldn’t be that person’s Will. In reality, it would be someone else’s Will, the person who thought up its terms and compelled you to sign it.
A person can have a Will made or modify an existing Will at any time up until the time of their death, if they retain the mental capacity to make a Will. The level of mental capacity that one must have to make a Will is commonly known as “testamentary capacity,” and it is a very low level of mental capacity.
To have testamentary capacity simply means that the person knows who his or her relatives are, knows the basic nature of their assets, and can create a basic plan for the disposition of those assets. Technically, even people who have been declared mentally incapacitated and for whom a court has appointed a guardian can make a Will. A person can be mentally incapacitated for purposes of entering contracts and handling their day-to-day finances, yet still retain the mental capacity to enter a Will. That’s how low of a standard “testamentary capacity” is.
This ability to always make a Will is a good thing. A person should be able to make a Will any time he or she wants up until the time of death. But the ability to make a Will or change an existing Will can also cause problems. Assume the following scenario: Two people marry later in life and each spouse has children from a previous marriage; the couple goes to a lawyer and each has a Will drafted that essentially says, “If I die first, everything goes to my spouse, and when my spouse dies, she agrees to leave half of her estate to my children and half to her children.”
There are no trusts in the Wills. Each has a relatively simple Will leaving their respective estates to each other and then to adult children. Yet, because a person can always make a new Will, what happens if the husband dies, leaving everything to his wife, and the wife goes to a lawyer and has a new Will drafted leaving everything to her children, effectively disinheriting the husband’s children?
In a previous column, I discussed placing trusts in each spouse’s Will to carry-out their true intentions: to provide for the surviving spouse for the remainder of his/her life, then to provide for their respective children; however, whenever you mention trusts, people get scared and look for “simple” fixes to their problems that will avoid the need for the trust.
One simple fix actually got its own statute in New Jersey. The statute is entitled, contractual arrangements relating to death. Essentially, this statute allows a person to enter a contract to either make a Will, not to revoke a Will, or to die without a Will.
The statute would seem to offer a simple solution to my suggestion that the above-mentioned hypothetical couple need to insert trusts in their Wills to carry-out their testamentary plan. After all, if the couple could enter a contract through which each spouse agrees not to make a new Will, then after the first spouse’s death, the surviving spouse could not make a new Will and disinherit the first spouse’s children.
Problem solved, right? Wrong. Although the surviving spouse – the wife in my example – cannot make a new Will disinheriting the husband’s children, she could gift her assets (which includes her deceased husband’s assets, as well) to her children. By gifting her assets to her children before her death, she leaves nothing in her estate to pass to the husband’s children.
I don’t know who lobbied for this statute. The statute’s solution to the problem posed in my hypothetical seems like one of the typical “simple” solutions that I often hear and that is, in reality, no solution at all.
Nothing works like proven techniques. Although real solutions may seem complicated, they offer a benefit over simple solutions that people often invent to get around proven techniques – they actually work.
A contract to make a will can create lasting legal obligations that affect beneficiaries, estate administration, and future planning decisions. Understanding how these agreements work can help families avoid disputes and ensure estate intentions are carried out properly.