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National Make-a-Will Month

Although many Estate Plans have a Revocable Trust as the foundation for the plan, Wills play an important role in a comprehensive Estate Plan. (NOTE: In Louisiana, since we speak a different language, we use the word “testament” as the technical term for what everybody else calls a “will”. Check out my website page on Louisiana legal terms.) Alarmingly, most Americans don’t have a Will even though they know it’s important. As National Make a Will month comes to a close, let’s explore the often overlooked and neglected Estate Planning document, the Will.

According to a recent report issued by Trust and Will, only 31% of Americans have a Will and just 11% have a Trust. That means over 55% of Americans don’t have any plan in place. The article discussing the report provided interesting statistics regarding the factors making individuals more or less likely to create an Estate Plan. The author cited age, income, education, wealth, and race among the most important indicators influencing the creation of an Estate Plan. Although this blog often focuses on Revocable Trusts and the flexibility, continuity, and protections that they provide, Wills play a vital role in Estate Planning. Many Trusts and Estates practitioners remind individuals that Trusts avoid the probate process, which can be lengthy and expensive in some states, but even a Trust-based plan needs to include a Will. Some people think that if they have a Revocable Trust, then they don’t need a Testament but that’s not correct.

Let’s start with the basics. If someone dies without a Revocable Trust or Will, that’s referred to as dying intestate. The Louisiana Civil Code has articles to control how things will be distributed address when someone dies intestate. If you die intestate in Louisiana, then your estate may need to go through probate. An individual will petition a court for appointment as administrator. That administrator will have legal authority to collect and distribute the decedent’s assets according to the distribution scheme in the Civil Code. That individual will probably need to hire an attorney to understand and navigate the complex court system. A judge oversees the many steps involved in this public probate process. Private information about the nature and extent of an dead person’s assets and the beneficiaries of those assets become public through the Louisiana probate process. This could allow nosy neighbors, predators, and others to pry into the lives of the decedent and their loved ones.

Revocable Trusts provide the solution to the probate issue. They allow the family to forego the probate process altogether. A person (the “Settlor”) can create a Revocable Trust and appoint a Trustee to step into their shoes upon their death and administer the Trust without court intervention. In this way, properly funded Revocable Trusts avoid probate. If, however, the Settlor of a Trust dies with just one asset titled in his or her individual name, then that asset might have to pass through probate. That’s the first reason why a person who has a Revocable Trust, needs a Testament as a “back-up” to the Trust. Despite the best efforts of the client and the attorney who drafted the Estate Plan, assets sometimes remain titled in the name of the Settlor at death. In most states, the only way to ensure that these assets end up in the Revocable Trust is through a “Pour-over Testament” that “pours” any assets passing through probate “over” to the Trust. The Testament acts as a backstop to the Revocable Trust. In addition, if a court declares the Revocable Trust invalid for any reason, the Testament can include provisions that direct passage of the assets in the same manner as in the Revocable Trust.

Second, certain states allow their residents to pass tangible personal property through a separate writing without the formalities required of a Will. These documents need to comply with the statutory requirements for validity, but generally, these writings need only reference the tangible personal property for distribution, the desired recipient of the property, and have the testator’s signature along with the date signed. Usually, states allowing a separate writing to pass tangible personal property require that the Will contain a direction regarding passing the tangible personal property according to such document. These states typically do not have companion statutes that allow a Revocable Trust to reference the memorandum.

Finally, anyone with minor children should have a Testament to name the “Tutors” who will take care of those children if the parents die. (In other states, this would be called a “guardian” but Louisiana uses different legal language than the other states.) Louisiana Civil Code Article 257 recognizes that this is usually done by a testament but it also says a Tutor can be named by a declaration “executed before a notary and two witnesses.” For most parents, deciding who will raise their children if they die before the children are old enough to manage their inheritance tops the list of important considerations for an Estate Plan. .

Remember, most of the time, the Revocable Trust represents the gold-standard in Estate Planning. They allow for flexibility, provide for continuity, avoid probate, and permit the Settlor to include protections and/or restrictions for their beneficiaries. It’s rarely wrong to create a Revocable Trust. Of course, when someone sets up the Trust, they need to ensure that they fund the Trust, otherwise, the assets pass through probate in accordance with their Testament. As this article has shown, Testaments play an important role in a comprehensive Estate Plan. A Testament serves as the sole legal document to accomplish certain things, and failing all else, the Testament will serves as a backstop to the Revocable Trust. If you have questions about your Estate Plan, how it works, or whether it’s appropriately structured, take advantage of “National Make a Will Month” and reach out to a qualified Trusts and Estates practitioner to review and update your plan.

John Pucheu
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About John Pucheu

I attended LSU in Baton Rouge and graduated with a B.S. in 1973. After working as a newspaper reporter, I attended LSU Law School and received a Juris Doctor degree in 1978. Then, I attended the University of Miami where I earned a Master of Laws in Estate Planning in 1979. Read More!