Basic Estate Planning: Why Have a Will?

Fact Sheet 4
EP-4
Community Development
Date: 
07/06/2012
James C. Skeeles, Ph.D., Extension Educator Emeritus in Agriculture and Natural Resources and Community Development, skeeles.1@osu.edu
Russell N. Cunningham, Attorney and OSBA Certified Specialist in Estate Planning, Trusts, and Probate Law, Barrett, Easterday, Cunningham & Eselgroth, LLP, rcunningham@ohiocounsel.com

Remember from the previous fact sheet that joint tenancy with right of survivorship (JTRS) property goes to the survivor, even if indicated otherwise in the will. However, upon death, most property is transferred as indicated by a will. The will is the most used method to direct property upon one's death.

A will is the basis of an estate plan, and often the most important estate planning tool. Every person 18 or older should have a will so that he or she can decide who gets his or her property, rather than the state deciding.

A will provides for disposition of property after death, and it appoints an executor and successor executor.

A will can . . .

  • appoint guardians and successor guardians if minor children are present.
  • appoint guardians and successor guardians for property management of minor children, if necessary (a trust can also be set up by the will, in which case trustees do this function).
  • create a trust or life estate.
  • waive the requirement of the executor to post bond.
  • name the assumed order of death in the event of a simultaneous death of spouses and/or children.
  • name alternative distribution of property in case a named beneficiary chooses not to accept property, or if the beneficiary predeceased the person making the will.
  • state specifically the powers granted to the executor.

The legal aspects of a will are as follows:

  • It can be created by anyone 18 years or older.
  • A will must be in writing and signed at the end by the person making the will (the testator). The will must also be signed by at least two competent witnesses who are not beneficiaries under the will. The testator must declare that the will is his or her last will and testament in the presence of the witnesses; the witnesses then sign to that effect at the end of the will. At the beginning, every will should state that it is the last will of the testator. A will that is corrected or marked up might be invalid. Every will should be dated so that those settling the estate can determine which one is the last one, if there are several.
  • A testator should review his or her will as things change throughout the years. The testator can do so as often as desired unless he or she becomes incompetent or becomes under the undue influence of another person.
  • Some forms of property ownership and certain rights given by law override provisions in a will. A surviving spouse can claim a share of the deceased spouse's property, as he or she would have received if there had been no will. The details of this will be discussed in the next section of this fact sheet.

The expense of making a will should not keep you from making one. Some attorneys will execute a will for a low fee. Even if you think you have all your property held in nonprobate form (a living trust), a will is still a good idea. You might have missed something, or money might be paid to your estate after your death. An example of this would be if one is killed in an auto accident where another is at fault. An insurance settlement could be due to the estate.

Ohio Statute of Distribution Without a Will

Every state has laws to distribute property when a person dies without a will (dies intestate). If no will is present, the probate court appoints an administrator to administer the estate. This person acts in a manner similar to the executor of a will. With no will, property is distributed according to Ohio statute.

Without a will, if there is a surviving spouse and no children, or all of the children are also descendants of the surviving spouse, the surviving spouse receives all of the probate estate of the deceased spouse. If the surviving spouse is the parent of at least one but not all children, the spouse gets the first $60,000. If the spouse is not the natural or adoptive parent of at least one child, the spouse gets only the first $20,000. The remaining assets are divided equally between the surviving spouse and child, if there is one child (or among descendants if the child is deceased). If there are two or more children, and the surviving spouse is not the parent of all children, the surviving spouse gets one-third of the remaining assets and the other two-thirds are divided equally among the children (or among descendants if deceased).

If there is no surviving spouse but there were or are children in the family, the children or their descendants receive all the property. If there are no children or surviving spouse and the parents are living, the parents receive the property. If no parents are living, brothers and sisters (or their descendants) receive the property. If there are no siblings or descendants of siblings, property is divided equally between the paternal and maternal grandparents or their descendants. If there are no descendants of grandparents, property goes to next of kin, no matter how remote the relationship. If there is no next of kin, property goes to stepchildren or their descendants. If none of the above can be located, the property of the deceased goes to the State of Ohio.

In addition, a surviving spouse might have other rights, such as the right to receive a family allowance of $40,000 or the right to receive up to two motor vehicles if the combined value is under $40,000.

The above distribution might not be what the deceased would have preferred, but without a will, this distribution is carried out regardless of the preferences of loved ones or heirs.

Power of Attorney for Health Care Decisions if Incompetent

In Ohio, several documents can be created that allow a person to convey to physicians and/or hospitals the wishes of a patient in the event that he or she becomes incompetent.

Ohio law gives priority to certain persons to make medical decisions in the case of incompetency. Even though these people are required to make decisions that are as much as possible consistent with what the incompetent person would have preferred, the persons designated by Ohio statute might not have been the ones preferred by the individual to interpret his or her preferences. Therefore, a durable power of attorney for health care can be used to designate the specific person (the attorney-in-fact) to make health care decisions in the event of incompetency. This document can relate to life termination and/or to lifetime health care decisions (such as selection of physicians or selection of medical facilities).

Living Wills

Concerning life termination decisions, some have concerns about being kept in a vegetable state, with no chance for recovery, while their estate is being consumed by medical expenses.

A person with the above concerns can create a living will to allow physicians to carry out his or her wishes of life termination in the event of being permanently unconscious or having a terminal illness.

The living will must be executed while the individual is competent to voluntarily declare intentions, and it must be dated and witnessed or notarized. If one wishes to communicate that hydration (water) and nutrition should be withdrawn in the event that they are unnecessary for comfort, that needs to be specifically stated in the living will. Comfort care is always provided and cannot be withheld from any patient.

For the living will to be activated, the attending physician first needs to be aware of the living will. Then, the attending physician and at least one other physician need to determine that the patient is incompetent to make decisions and in a terminal condition, or permanently unconscious. The physician then must either implement the wishes of the patient as conveyed in the living will, or the physician must inform the attorney-in-fact or family (if there is no health care power of attorney) that he/she or the hospital cannot comply. If the patient's wishes cannot be carried out by the physician and/or the hospital, the physician and/or the hospital must allow the transfer of the patient to a physician or hospital that will comply.

In the event that there is both a living will and a health care power of attorney, the living will takes precedence for life termination decisions. Therefore, it might be appropriate to have both a living will and a health care power of attorney so that a designated person (the attorney-in-fact) has the power to make care decisions in the case of incompetence, while the living will relays life termination intentions. However, you should be covered legally with only the health care power of attorney.

Some people are uncomfortable signing a living will because it places authority in the hands of doctors rather than family members. Others are uncomfortable with it because of religious convictions. Most people sign both documents because they do not want to burden family members during a stressful time.

The durable power of attorney for health care and the living will have only been recognized by Ohio law since 1989. Permanent durable powers of attorney for health care and living wills have only been recognized by Ohio law since 1991. Those who have not rewritten or revised a will since then, likely have neither. You should consider drawing up these documents if you haven't done so already. You should also consider reviewing your will. Be aware that preprinted forms are available from hospitals, libraries, AARP, etc.

These fact sheets should in no manner be considered as a replacement for consulting with estate planning professionals, nor should the general principles in these fact sheets be applied to specific situations without consulting with an attorney. 


Your Response

Fact Sheet 4

1. Do you have a will? Yes _____ No _____

2. If the answer is no to question #1, do you agree with the state's plan for distribution of your assets?

Yes _____ No _____

3. If the answer is yes to question #1, does your will need to be updated? Yes _____ No _____

4. Do you have . . .

a. a durable power of attorney for health care? Yes _____ No _____

b. a living will? Yes _____ No _____

5. If the answer to either part of question #4 is no, have you considered a durable power of attorney for health care and a living will and decided against them? Or do you wish to have them but just haven't had them made yet?

considered but don't want _____

just haven't had them made _____

6. Do you have a letter of instruction? Yes _____ No _____

If not, pay particular attention to the next fact sheet.


Answers

Fact Sheet 4

1. Do you have a will? Yes _____ No _____

A will is easy, inexpensive, and it is the base of an estate plan. Those who wish to avoid probate by placing property in a living trust should have a will, just in case they missed including any property.

2. If the answer is no to question #1, do you agree with the state's plan for distribution of your assets?

Yes _____ No _____

The Ohio plan for allocation of assets is outlined on pages 2 and 3 of this fact sheet. If you don't have a will and do not plan to write one soon, you need to revisit Ohio's plan for allocation of your assets. If Ohio's plan is not completely to your liking, you need to do something now to take the first step toward getting a will. Expense is not an excuse for inaction in this case.

3. If the answer is yes to question #1, does your will need to be updated? Yes _____ No _____

Your will needs to be updated if benefactors need to be changed, if allocation of property changes, if major property purchases are made, if executors change, if tax law changes necessitate changes, etc.

4. Do you have . . .

a. a durable power of attorney for health care? Yes _____ No _____

b. a living will? Yes _____ No _____

A power of attorney designates someone of your choosing to make decisions when you are not capable of making those decisions. A durable power of attorney designates that person on a long-term basis. A power of attorney for health care designates a person only for health care. You can designate another person for financial decisions if you choose. If you made your will before 1991, you most likely do not have a durable power of attorney for health care. The law was changed in 1991 to allow for a permanent durable power of attorney for health care.

5. If the answer to either part of question #4 is no, have you considered a durable power of attorney for health care and a living will and decided against them? Or do you wish to have them but just haven't had them made yet?

considered but don't want _____

just haven't had them made _____

A living will allows you to dictate to doctors that you wish not to be kept alive in a vegetative state. Again, if you made your will before 1991, you most likely do not have a living will as the law was changed in 1991 to allow for permanent living wills.

If you just haven't done it yet and wish to do it, do it! Preprinted forms are available; however, your executor and others close to you need to know of their existence and where they are located.

6. Do you have a letter of instruction? Yes _____ No _____

If not, pay particular attention to the next fact sheet.

Details too numerous for a will (or too specific) are appropriately contained in a letter of instruction. Simple details such as the location of important documents can be included in a letter of instruction. Details like these are of much help to executors and others handling the affairs of the deceased.

 

Program Area(s): 
Ohioline http://ohioline.osu.edu