behind the curtain – a guide to handwritten wills

I like magic. By magic I mean the kind performed, not Harry Potter (though I like him, too). I’m not yet even a hobbyist,  but I love to watch. I particularly love the work of Penn and Teller and those like them, who know their craft so well they will explain more common tricks.

In that theme, here is my first aid to do-it-yourself estate planners. I have mentioned handwritten wills, now I’ll give some guidelines to how to write one.

The holographic will is not fanciful science fiction – it is the legal term for a will written completely in the handwriting of the testator. Because it is all in one hand, the holographic will does not require any witnesses. For a decent novel as to what trouble that fact alone can produce, see John Grisham’s The Testament. The Will has few if any magic words required, but here’s a template:

1.  “This is my last will and testament.” – Not actually necessary, but definitely helpful. A will is ultimately defined by whether its  content meets the requirements of the Statute of Wills, but a label will help everyone, especially non-legal friends and family, know what they are looking at. Also it makes clear this is an entire will vs. a codicil, which is an update to a portion of a prior will.

2. “I revoke all other wills and codicils.” – Again not necessary but useful. The last valid will properly executed is the proper will to probate and will supercede all others, whether this language is in it or not.

3. “Upon my death, give everything to my beloved wife Betty.” – This is really it. It contains a gift (everything) and a beneficiary (Betty) and is only meant to happen upon death. This sentence alone is a valid will if signed and entirely written by the testator.

4. “If she dies before me, give everything to my son, Sonny, and my daughter, Doris, in equal shares.” – Successor beneficiaries are always a good idea.

4.5. “My ingrate son, Cletus, gets nothing. He knows why.” – Of course this is not necessary, but excluding people who would otherwise inherit if there were no will is a very good reason to have one.

5. “I name my wife, Betty, to act as my executor. She should act independently and without bond. ” – It is not required that an executor be named in the will, but you are giving your loved ones direction which is usually very helpful.

6. “If Betty cannot act as my executor, I name my son, Doris <no one commented on this slip-up… it was a doozy… son is Sonny and daughter is Doris… proper identification is very important!> as my executor, also acting independently and without bond.” – Successor executors are a good thing, too.

7. “Signed on January 21, 2010.” – Not necessary, but helpful if there are multiple wills drafted over time in determining which is the latest.

8. <Signature> – 99% certain this is required – need to confirm that. I dimly remember that a holographic will may not need to be signed since it is all in the testator’s hand, but just sign it already!

That’s it. Please note that a properly drafted will by a competent attorney, like say, me, is a better and more comprehensive document than this. This is better than nothing. Also the will above is appropriate for an older couple with adult children. Minor children can neither receive property as beneficiaries under a will nor can they act as executor. A young couple needs to include guardianship and / or contingency trust information for their minor children.

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a case study for some (just a little!) estate planning

Nothing particularly tragic or soap opera like needs to happen to you to need some estate planning, consider the following happy life:

Well educated engineer has close siblings and is close to his parents, though he never marries nor has children. The engineer retires happily after a long stable career to a life of golf and other hobbies. Blessed with good genes, he celebrates his mother’s 100th birthday with his multiple surviving siblings and other extended family. Soon after, he passes away literally doing what he loves on the gold course with his siblings.

Near idyllic, right? There are problems, however. The engineer died without a will. Some of his retirement benefits had a beneficiary designation, some didn’t. So the house, all his personal property, cars, and investments not given a beneficiary designation need some form of probate to pass to the family.

But this is a man who loved his mother and siblings, so what is the problem? The problem is surviving mother, first and foremost. Under the law of intestate succession (dying without a will) in Texas, Mom will get 1/2 of the probate estate. Aside from her not needing the house, or car, or golf clubs, these assets are now available to the State to reimburse her long term care from Medicare or Medicaid.

A simple will designating the siblings or others as the beneficiaries would keep much more, if not all, of this engineer’s estate in the family.

E.

Probate in Texas is nothing to fear!

Many people have accused me of not wanting to make money. The truth is I need to be more diligent about my billing and marketing and generally not procrastinating, but more on that in other posts. There is a positive side, however, especially for my clients. I was a computer programmer for 5 years prior to law school and a hobbyist and tinkerer for life. That instills in me a love of the most efficient and simplest solution. I believe in finding that for my clients (or even non clients if there is a solution so simple as to not need a lawyer). While people do not think of legislative codes as either efficient or simple, I am here to say the Texas Probate Code is (relative to other states and countries) both.

I have said before and will say again, Texas is a great place to live and a better place to die. The vast majority of Texas families and individuals are best served by a simple will to handle their financial affairs at their passing. No trusts. No family limited partnerships. No $5000 secret seminars with foolproof tax-free Nevada corporations. In fact, absolutely no planning is probably better than dropping a few thousand dollars on paranoia-fueled legal instruments that will do nothing at best and incur further expense and complication at worst.

Before my ethical (screw the other ones) but higher billing peers berate me (hypothetical right now as I think I have no readers), there are at least 3 broad reasons to consider a living trust or other more complex instrument (I’ll refer to this just as a trust from hereon out unless otherwise noted) in Texas:

The first is real property (meaning dirt) owned outside Texas. Texas Probate is wonderful, but Texas Probate Courts only have jurisdiction over the decedent’s personal property (wherever it may be) and real property in Texas. Real property placed in trust can avoid probate in another state.

The second is estate tax planning.  The exact $ amount for worrying about this is a moving target right now, thanks to our wonderful Congress, but if the estate is less than $4 million dollars, there is no need to consider the estate tax in your planning.

The third (and I’m cheating and combining 2, really) is having enough to fight over and being near certain estranged family, creditors, or other parties are going to come in and fight for it, or being dead set on the contents of your estate not being public record. A properly drafted trust is much more difficult to contest by non-beneficiaries than a will. This is actually a good thing. The last properly executed will is the good one, assuming the decedent had testamentary capacity when he drafted it, and we want everyone to come out of the woodwork and find that last will. The fights can be no fun (though I like em), but they ensure that all interested parties are at the table and hopefully the decedent’s intent gets done. As part of that, a will must be filed publicly to be probated, so if you do not want the contents of that will out there when you die, consider a trust.

That’s it. People have come into my office dead set on a nice expensive trust and left with their needs better served by a simple will and a couple other documents (for planning in later life, not Probate), or sometimes nothing at all. And I make less money. Dammit.

E.

About the author

I’m Eric J. Smith, an attorney in Arlington, Texas. This blog is meant to be mostly my professional face and should reflect professional insight primarily in Texas Probate and Estate Planning law. That said, I am a sole practitioner and therefor a small business owner, so much of this blog may drift into general business development, money management, marketing, networking and all the other hats that entrepreneurs wear. Long before I was a lawyer I had a passion for politics and civic involvement – I am a member and board member of both the Kiwanis Club of Arlington Southwest and the Arlington Bar Association.  Though it is my adopted home, I love Arlington, Texas and will surely gush on it from time to time here, as well as offer hopefully constructive criticism.

My faith and my love of my wife and family is of course central to who I am as a person, but again this is meant to be a professional blog, and those looking for my son’s latest basketball triumphs will have to find me on Facebook.

I look forward to seeing what this might accomplish.

E.