Your Will
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What is a will?
A will is a written document which states how and to whom you wish your
property to go after your death. There are certain requirements which
must be met for a will made in South Dakota to be considered legal.
The law requires that:
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The maker of the will (called
the testator) be at least eighteen (18) years old and of sound mind.
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The will must be written. (An
oral will may be considered legal only in certain unusual
circumstances.)
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The will must be witnessed
strictly in accordance with the law. (No witnesses are necessary if the
will is dated and if the signature and instructions are in the
handwriting of the testator. This is called a holographic will.)
Changing your will
A will is in effect until it is changed or revoked. You may do that as
often as you wish. You should review your will from time to time. A
review of your will every three (3) to five (5) years is recommended as
there may be changes in your family circumstances, in the amount and
the kind of property you own, and in tax laws which could necessitate
changes in your will.
A will you make when you are single is not revoked when you marry, but
if you do not provide for your spouse, upon your death, your spouse
receives what he or she would have received had you died without a
will. All changes in your will, including any change in marital status,
require a careful analysis and reconsideration of the provisions of
your will to insure that it reflects your wishes.
Handwritten revisions on a will may not be effective in order to change
the will. A will may be changed by re-writing it in its entirety or
through a codicil. A codicil is a written amendment which can change a
single provision or several provisions in the will, leaving all other
provisions of the original will in effect.
Restrictions
Although you may dispose of your property in almost any way you wish
through your will, there are some restrictions. Married persons may not
completely disinherit their surviving spouse, unless their spouse
agrees.
Depending on the provisions in the decedent's will for the surviving
spouse, the surviving spouse may exercise an option to take an elective
share in lieu of the provision made in the will. The amount of the
elective share is determined bythe length of time the spouse and the
decedent were married to each other.
Other provisions in the law provide for benefits to the surviving
spouse and the decedent's children. These additional benefits can be
explained by your lawyer.
If you have children, you are not required to leave them any portion of
your estate. A common misconception is that a person must leave each
child at least one dollar. This idea may have evolved from the fact
that the failure of a will to make a provision for or "remember" a
child results in a presumption that the person making the will merely
forgot to include that child. To overcome this presumption, the person
making the will in the years past would leave, "The sum of one dollar
to my son, John." Today, an accepted provision is, "I have
intentionally failed to provide for my son, John."
Expense
If there is property to be administered or taxes to be paid, the fact
that you have a will does not increase probate expense. A will can, in
fact, actually reduce expense.
If there is no will
The property of a person who dies intestate (without a will) is
distributed according to a formula set by state law. This is called
intestate succession. First, all debts, costs of administration of the
estate, and certain other expenses must be paid. If there are minor
children who receive property, it may be necessary for a conservator to
be appointed by the court to manage and account to the court for the
property which the minor child has inherited.
A spouse is to receive the entire intestate estate unless the decedent
was survived by descendants of a prior marriage or other relationship,
in which event the spouse receives $100,000.00 plus half of the
remaining estate.
If you elect not to have a will, you must consider that the legislature
can change the laws of intestate succession. Therefore, you will not
have certainty concerning the way in which your property will be
distributed.
Life Insurance
Life insurance is not a substitute for a will. Life insurance is a
contract between the insured and the insurance company which provides
for payment of insurance benefits to beneficiaries which the insured
may name. Insurance policies which require payments to minor
beneficiaries may require the guardian of those beneficiaries
to establish a conservatorship. A conservatorship would require an
annual accounting to the court. Any life insurance proceeds payable to
a child over the age of eighteen (18) years will be paid directly to
that child. Life insurance programs should be coordinated with the
individual estate plan since a will does not override a specific
beneficiary designation. It is to your benefit to have advice from your
lawyer and life insurance counselor.
Drafting your will
Drafting a will involves decisions which require professional
judgments. A lawyer can help you to avoid many pitfalls and advise you
concerning your best course of action.
Designating beneficiaries on your insurance or annuity policies and IRA
or 401(k) accounts, or naming joint tenants with right of survivorship
on real estate titles or certificates of deposit, can create unwanted
or unequal distributions. Since named beneficiaries and joint owners
take outside of the will, your will does not control these
distributions.
Competent advice in drafting a will and planning an estate, with the
assistance of your attorney, can, in many cases, reduce tax
consequences and prevent unforeseen problems in the administration of
your estate.
Ownership of Assests
Joint tenancy should be distinguished from tenancy in common. Joint
tenancy property, upon the death of one of the joint tenants, usually
goes to the surviving joint tenant.
Tenancy in common property usually means that each tenant in common
owns an undivided interest in the property. Upon the death of one of
the tenants in common, that person's property will be distributed to
the person named in the will or to the person's heirs under the
intestate laws.
Many people have their property owned in joint tenancy. This
arrangement is not likely to save either taxes or expenses in the long
run. There are instances where joint tenancy is useful, but as in other
estate plans, the use of joint tenancy should be coordinated with your
general plan of distributing your assets to your heirs. Countless
problems can be created by the indiscriminate use of joint tenancy
ownership. Consultation with your attorney is recommended.
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