Episode 5: Louisville probate attorney Scott Scheynost has drafted Wills for clients for over 30 years. In today’s episode, he may surprise you with his advice on what to include or exclude from your Will. Let’s join Scott for this interesting episode.
Editor’s Note: Before we begin, you might find it helpful to listen to Episode 1, which provides a general overview of Wills and Probate.
Scott Explains His Personal View on Wills
Scott’s opinion is that a Will should be a simple as possible. If you give heirs a certain percentage of the estate, they can often decide what’s an equal or fair way to divide the estate. It’s possible certain assets may have a higher “emotional” value to one, more so than to the others.
For the above reason, Scott recommends giving the executor a significant amount of discretion. Admittedly, everyone’s situation is unique. You may want to give (“bequeath”) specific items to specific heirs, but understand the more detailed and complicated the Will becomes, the more fees an attorney will typically charge.
Simple Will Package
For many years now, Scott has provided a Simple Will Package, which works well for most people. It includes a basic Will, a Durable Power of Attorney and Living Will Directive.
This Will can actually save money and time in the probate process. In Episode 3, Scott explains the process to start a probate claim, in Kentucky.
What to Include in Your Will
In Scott’s experience, he understands that many of the things we own are more valuable to us than to other people. The items with significant value, such as the titled assets (the house, cars, bank accounts, etc.) and certain types of collections are things to include in your Will.
Remember to Include Specific Language to Make Probate Easier
Imagine if you have certain property (either personal property or real estate) at the time you created and executed your Will. Sometime down the road, you may decide to sell the property, however, you forget to update the Will to reflect the change. Is the Executor now obligated to use estate funds to purchase the same or similar item? It could create a legal issue for the estate.
Instead, make sure your Will includes language stating that if you no longer own the item at the time of your death, the bequest lapses and no longer has to be enforced. This means your intention no longer needs to be enforced, as it relates to this specific asset.
A collectible car may be something to include in your Will, assuming you want it to go to a specific heir. However, we normally sell and replace automobiles over time. For this reason, you may not need to specifically include your average vehicle in your Will. It will already be part of your estate, at the time of your passing.
Your Will Becomes a Public Record
During the probate process, the Will is submitted to the court. This makes it a public record. Anyone can gain access to your Will and know what you have in it. For this reason, Scott recommends that, again, you keep it simple. Some people include passwords and information about bank accounts in Wills. If you do this, you risk exposing sensitive, private information to the general public. Once a Will has been recorded in Jefferson County, Kentucky, it can be found on the internet – by anyone.
Scott recommends redacting personal information from your Will.
Where Should You Keep Your Will?
Scott does not recommend filing your Will at the courthouse. If you filed it there, any subsequent changes to your Will would also need to be filed, to avoid problems probating the Will.
Scott recommends you keep it in a fireproof lock box or a safe. You want to make sure it won’t get destroyed in a house fire.
Scott doesn’t recommend putting the Will in a safe deposit box at the bank. At the time of your death, a bank can freeze all of your accounts, this can include your safe deposit box. There’s a process, which may require your attorney to get involved, to convince the bank to open the box to see if it contains your Will.
The easiest thing is to keep it in a sealed envelope. You can even let your heirs know where it is, so they can find it. Scott explains this also gives you the opportunity to make changes, without your heirs knowing about the changes.
IMPORTANT: If you decide to keep your Will in a fireproof box or a combination safe, it’s a good idea to give a key or the combination to a trusted person (consider your pre-appointed executor), so they can get access the Will, when they need to find it.
What to Exclude from Your Will
Scott explains how people often assume certain assets will become part of their estate, after they pass. However, that may not be the case. Normally, a jointly-owned asset (such as a house) usually passes to the surviving spouse, outside of probate. Therefore, it doesn’t need to be listed in the Will. Make sure your deed specifically lists both spouses and states “joint tenancy with right of survivorship.” This enables the house and property to transfer automatically.
If you are, then, the surviving spouse, you might want to add the property to your Will if you intend to leave it to someone. In this case, you are now the sole owner, rather than owning it jointly with your spouse prior to his/her death.
Retirement Plans, 401(k), Pensions and Life Insurance
These actually don’t need to be added to the Will. These types of plans already have a beneficiary designation. You probably signed this when you set it up. If so, the proceeds will be distributed to the beneficiary, outside of the estate and probate process. The exception would be if you named the estate as the beneficiary. That’s not always a good idea, for a variety of reasons.
NOTE: By the way, this would be a good time to check if you’ve completed this designation. Have you divorced or had additional children? Now would be a good time to make any necessary changes to the beneficiary designation.
Bank Accounts Designated as “Payable on Death” (POD)
Jointly owned accounts will transfer to the surviving spouse, as long as he/she jointly owns the account, so those wouldn’t need to be added to the Will. However, you can also set up bank accounts as “Payable on Death.” This enables the funds in that account to pass to a designated person upon your death. A child, sibling or someone else could be the designated recipient. These funds would pass outside of the estate and probate.
A POD account does not grant access to the funds, until you pass away. You aren’t giving someone the authorization to write checks or make withdrawals. They have no access to the funds until your death occurs.
Interestingly, Scott points out that if the bank cannot locate the designated recipient, there’s a chance the POD account’s funds in the account may end up going to the state. That wasn’t a typo. The funds could go to the state, not the estate.
Passwords
As Scott previously stated, he would not advise including passwords in your Will. The risk is that the Will does become a public record, allowing others to discover your passwords and access various accounts. You might consider using a digital vault to store your passwords.
Now let’s return to provisions you may want to include in your Will. Consider how your pets will be cared for, after your passing.
Can My Will Include Money for My Pets?
Actually, yes. This is becoming a more popular item in people’s Wills. You can designate who will care for your pets and even provide money for future food and veterinary bills, among other things.
Be sure you have a conversation with the person you’d like to take care of your pet. You need to make sure that person is willing to accept the responsibility. It’s possible for someone to refuse to accept the pet. Again, it’s something to think through as you draft your Will.
Small Business Owners
Before we wrap up, it’s important to provide some advice for small business owners. Businesses have a variety of ownership options from LLCs, to partnerships, to corporations, etc. It’s important that you, as a small business owner think through what you want to happen with your business, once you’ve passed away.
There are a lot of considerations, including but not limited to:
- Who will receive the property and assets?
- Who will run the business, going forward?
- Who will sign paychecks from your business accounts?
It important to seek the advice of an attorney and an accountant to make sure you have a plan in place.
We hope you found today’s information helpful. It would help us if you’d consider sharing this episode on your favorite social media channel, so others get a chance to learn about this topic and how Scott may be able to help. Thank you for listening.
For more information, visit LouisvilleProbateLaw.com.
It Cost You Nothing to Speak with Scott
Contact Scott Scheynost at (502) 937-5287. This podcast is meant to provide information and is not legal advice. Scott’s principal office is located at 7619 Dixie Highway, Louisville, KY 40258. Co-host Jim Ray is a non-attorney spokesperson. This is an advertisement.