What is estate planning?
A process involving the counsel of professional advisors who are familiar with your goals and concerns, your assets and how they are owned, and your family structure.
It can involve the services of a variety of professionals, including your lawyer, accountant, financial planner, life insurance advisor, banker and broker.
Covers the transfer of property at death as well as a variety of other personal matters and may or may not involve tax planning.
The core document most often associated with this process is your will and/or trust.
What happens if you die without a will?
If you die intestate (without a will), Mississippi’s laws of descent and distribution will determine who receives your property by default.
Typically the distribution would be to your spouse and children, or if none, to other family members.
That plan may or may not reflect your actual wishes, and some of the built-in protections may not be necessary in a harmonious family setting.
A will allows you to alter the state's default plan to suit your personal preferences.
It also permits you to exercise control over a myriad of personal decisions that broad and general state default provisions cannot address.
If you’re the parent of minor children, the court will decide who will serve as guardian.
What does a will do?
Provides for the distribution of certain property owned by you at the time of your death, and generally you may dispose of such property in any manner you choose.
You may designate a guardian for your minor child or children if you are the surviving parent and thereby minimize court involvement in the care of your child.
You may designate an executor (perjsonal representative) of your estate in your will, and eliminate their need for a bond.
You may choose to provide for persons whom the state’s intestacy laws would not otherwise benefit, such as stepchildren, godchildren, friends or charities.
What does a will NOT do?
Does not govern the transfer of certain types of assets, called non-probate property, which by operation of law (title) or contract (such as a beneficiary designation) pass to someone other than your estate on your death.
For example, real estate and other assets owned with rights of survivorship pass automatically to the surviving owner. Likewise, an IRA or insurance policy payable to a named beneficiary passes to that named beneficiary regardless of your will.
These assets pass automatically at death to another person, and your Will is not applicable to them unless they are payable to your estate by the terms of the beneficiary designations for them.
How do I execute (sign) a will?
In Mississippi, wills must be signed in the presence of two witnesses, over the age of 18, who do not stand to inherit from the testator (person making the will).
Attested wills are only valid if they meet a certain set of requirements: 1) the testator must sign the will or someone else must sign it for the testator at his or her direction; 2) if the witnesses did not actually see the testator sign the will, the testator must acknowledge his signature to the witnesses and publish the will to the witnesses when they sign the will; 3) the witnesses must sign the will in the testator’s presence; and 4) the witnesses must be credible.
Attorneys usually include an “attestation clause” that lists these requirements and states they have been satisfied.
What is jointly-owned property?
If you own property with another person as joint tenants with right of survivorship (not as tenants in common, the property will pass directly to the remaining joint tenant upon your death and will not be a part of your probate estate governed by your will (or MS’s laws of intestacy if you have no will).
Frequently, people (particularly in older age) will title bank accounts or securities in the names of themselves and one or more children or trusted friends as joint tenants with right of survivorship.
Titling accounts jointly, while sometimes done as a matter of convenience to give the joint tenant access to accounts to pay bills, often leads to unexpected or unwanted results.
Jointly-owned property: A warning
Disputes, including litigation, are common between the estate of the original owner and the surviving joint tenant as to whether the survivor's name was added as a matter of convenience or management or whether a gift was intended.
The planning built into a well-drawn will may be partially or completely thwarted by an inadvertently created joint tenancy that passes property to a beneficiary by operation of law, rather than under the terms of the will.
In many instances, clients prepare wills believing that the will governs who will inherit their assets when in fact, the title (ownership) of various accounts or real property, for example, as joint tenants, or beneficiary designations for IRAs, life insurance and certain other assets control the distribution of most or even all assets. This is why merely addressing your will is rarely sufficient to accomplish your goals.