It is true that most Americans do not have even the most basic estate plan in place. This is where, as an Advisor, you can add value to your client relationships by paying attention to the validity of wills for those people who do have a will or are engaged in the estate planning process. Will contests are surprisingly common, and nontraditional wills such as handwritten and oral wills, as well as do-it-yourself wills prepared without an attorney, may be less likely to meet legal requirements.
Why Fewer Americans Are Making Wills
To nudge a client toward creating a will, it is important to understand why they have neglected this task—and what could inspire them to take action. The top reasons cited for not having a will in a recent Caring.com survey[1] are
- procrastination (43 percent),
- a belief that they are too poor or do not have enough assets (40 percent),
- unsure how (16 percent), and
- costs too much (16 percent).
Respondents who say they do not have a will are made up of various ages and races and have a range of incomes and educational backgrounds. There are also different ages, genders, and income levels among those who reported what finally motivated them to create a will.
Types of Wills
A will is a legal document that states how a person wishes to pass down their assets (money and property) when they die. A will should reference the beneficiaries who will receive the deceased’s assets, how much each beneficiary will receive, who will administer their estate and wind down their affairs, and, if they have minor children, who will serve as their guardian (and backup guardian).
Ideally, a will is typewritten and signed by the willmaker (the testator) and two or three witnesses (depending on state law). Additionally, it is recommended that the testator engage the assistance of an experienced estate planning attorney to help ensure that the will meets all applicable legal requirements. An attorney can also help navigate through potential issues that could otherwise lead to a will contest in the future.
Potential Issues with Oral and Handwritten Wills
Some states allow handwritten wills and oral wills:
- A holographic will is handwritten and signed in the testator’s own hand
- A nuncupative will, informally referred to as a “deathbed will,” is stated orally, usually in a recording or to a witness.
Why would somebody create a handwritten or oral will instead of a traditional, typewritten one? Often, it is because they have not yet created a formal will, and an emergency forces their hand. By guiding your clients to properly take steps to formally execute a will would help to avoid this type of situation.
Informally created wills can raise numerous issues. Such a situation famously occurred with the estate of Aretha Franklin. The Queen of Soul had a handwritten will that was recognized in her home state of Michigan. However, difficulty deciphering her intentions due to scribbles and hard-to-read passages led to a lengthy legal dispute among her heirs.
This is a major issue with handwritten and oral wills: they are more prone to containing mistakes and ambiguities that cause confusion or lead to extensive litigation. The validity of holographic and nuncupative wills can also be harder to prove.
It is up to the court to validate a will. If the court does not accept the offered will, state law—rather than the testator’s wishes—could dictate how estate assets are divided among loved ones.
An unclear will can also lead to an heir contesting it. Research suggests that up to 3 percent of all wills in the United States are contested in court.[2] Will contests undermine the testator’s intent and can deplete estate assets and turn loved ones against one another.
Beyond Simple Wills
Planning how one’s money and property will be passed down to loved ones is the most fundamental function of a will. Even the most basic will includes provisions naming a personal representative, beneficiaries, and guardians of minor children. A will can also include more advanced planning provisions that provide more context and details about distributions, such as instructions for pet care or for an inheritance left to a minor child or other individual who may need their inheritance managed and safeguarded for a period of time or indefinitely.
A will is a must-have estate planning document for anyone 18 or older. It just scratches the surface, though. Clients, especially those with larger estates, should also consider a revocable living trust to manage their assets without court involvement, powers of attorney that provide trusted decision-makers the authority to make financial and medical decisions on the client’s behalf, and a living will that gives instructions about medical care and end-of-life decisions.
Financial Planning for the Present and Future
Working together, we can bring greater effectiveness and continuity to clients’ big-picture financial goals of investing, saving, tax strategies, estate planning, philanthropy, and legacy. Collaborating ensures we are serving the best interests of our clients.
To discuss how we can help you use estate planning considerations to deliver a stronger client experience, build loyalty, and introduce new revenue streams, please reach out at 708.448.5169 and schedule a meeting.
[1] Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited Jul. 31, 2024).
[2] Margaret Ryznar & Angelique Devaux, Au Revoir, Will Contests: Comparative Lessons For Preventing Will Contests, 14 Nev. L. J. 1 (Jan. 15, 2014), https://scholars.law.unlv.edu/cgi/viewcontent.cgi?article=1525&context=nlj.
