Last Will and Testament

You will hear on the radio and from pretty much everyone that you HAVE to have a will.  I may be committing “attorney heresy” but I am of the belief that not everyone needs a Last Will and Testament.  And, I will go even one step further to say that many elderly people are actually worse off having a will that says what they think they want it to say.  Let me explain.

Having a will does NOT avoid probate.  However, having a will does not guarantee that you go through probate either.  Probate is only for the items that are “stuck” in your name at the time of your death, such as a home or bank account that is only in your name.  Therefore, if your home and bank accounts have a co-owner, then the other owner will own that asset at the time of your death.  (there are significant problems with co-ownership though)  This is a common way to avoid probate.  Also, if there is a co-owner or beneficiary to the insurance policy or the bank account, then the money there will go to the other owner or the beneficiary of that account.  You make a beneficiary to a bank account by having the account “Payable on Death” to a person.  This still allows the account to be owned by you solely, but then at the time of your death, the money then goes to that person.

A Last Will and Testament is the road map for the probate process.  It states who gets what at the time of your death and possibly who should be the guardian of your minor children at the time of your death.  It tells the court what to do or what your preferences are.  A Last Will and Testament is necessary for late in life marriages where the money needs to go to your children rather than to your spouse, or if you want your money to go to someone other than your children, such as a charity.

How can a will make you worse off?  When my elderly clients come in for estate planning.  Many of them want to save money by doing only a Last Will and Testament.  I ask them what they want to do with their stuff when they die.  Their reply, without fail is “of course, I want to leave all my stuff to my spouse and then to my children”.  My reply is “of course, that is NOT what you want to do”.  They ask (with a startled look on their face) “Why would you say that?”.  Before, I answer that question, let me just say that making this very small mistake, of putting your spouse as the immediate first beneficiary of your will, can cause you to lose ALL of you estate to the nursing home.  Non-elder law attorneys do this all the time, and I personally think it is approaching malpractice to do a Last Will and Testament that way.

My answer is that my estate plan for the elderly client is not so much focused on death but on the issues that surround a person toward the end of their life. First, how do 99% of all elderly people own their possession?  Jointly with their spouse.  That means that they own it together and that when one of them dies the other spouse automatically owns all of the property.  Therefore, your statement in the Last Will and Testament is simply repeating what is automatically going to happen.  The first spouse dies and the other spouse then is the surviving owner.  Then, what is the problem with my will saying the same thing that is going to automatically happen?  Medicaid!!!!  We can get a spouse on Medicaid and protect a very large portion of the estate.  We do this by using the Medicaid laws to get as much of the property to the “well spouse” (in their name alone) and leave nothing for the spouse that is in the nursing home.  So, the well spouse owns everything and the sick spouse is in the nursing home and getting Medicaid.  Now, what happens when the “well spouse” dies in a car wreck going to see the sick spouse?  If they did their will with Legal Zoom or even the attorney that did what they told them to do, all of the assets go to the spouse in the nursing home.  That spouse looses their Medicaid benefits and the entire estate will most likely be lost to long-term care expenses.  You never thought of that did you?!  That one adjustment to your estate plan, done by an experienced elder law attorney, can protect your entire estate.

I’ve obviously not told you everything that you need to know to do this correctly due to it taking many more pages than you care to read.  There are some major legal issues that have to be handled to get this done correctly, but it can be done and you cannot do it by yourself.  That is simply a fact.  Actually, not having a Last Will and Testament (if it says to leave everything to your spouse) is best, compared to the Legal Zoom Will, when you are elderly.  Arkansas law says that only one third goes to your spouse and two thirds goes to your children.  This is much better than having an improperly written Will.  Spending the money it takes to get a true professional to do it correctly can literally save you your entire life savings.