A Joint Will IS NOT a Mutual Will, although it is a common misconception. The name may lead many to believe the two are similar, but there are important differences between the two.
A Joint Will is single document, executed by both you and your partner. It is a planning tool which can be used for those who are not in “traditional” relationship, and plan for the death of your partner or significant other. It is only upon both partners’ deaths that a Joint Will is probated. Most important, when properly drafted, a Joint Will is a legally binding contract.
Generally, a Joint Will states when the first partner dies, under the terms of the joint will, the surviving partner inherits the entire estate of the deceased partner. After the death of both signatories, the estate is distributed under the terms of the Joint Will. Usually, these wills are drafted so that they can only be changed or revoked by both parties who execute the will. That means, when one partner dies, the will cannot be changed, and the beneficiaries of the will are set in stone. If the surviving partner remarries, any children of the first marriage will not have to worry about their inheritance transferring to their new step parent.Joint Wills are a product of the past.
In today’s society, Joint Wills are burdensome. Your circumstances in life are constantly changing, and no one’s future is certain. Because the provisions of a joint will are impossible to change after a partner’s death, a Joint Will cannot adapt to the unanticipated changes of life. In the event your partner passes away early in life, you will be limited by the Joint Will for years, or potentially decades, after their death.
Potential Problems of a Joint Will:
The Joint Will can prevent the surviving partner from helping potential grandchildren with their college expenses, or distribute a child’s inheritance early.
If a piece of real estate or property is specifically named in the Joint Will, the surviving partner will be restricted from selling or transferring that piece of property.
If the surviving partner remarries, they will not be able to leave any assets to a stepchild.
If a child spends money in an extravagant and irresponsible way, commonly known as a spendthrift, the surviving spouse cannot place restrictions on the money to be inherited.Modern Joint Will Alternatives
Establishing trust is great alternative to Joint Wills. Setting up a trust allows partners to ensure their children will inherit everything after their death, but can allow the flexibility to make distributions or gifts. Surviving partners can modify the terms of the trust, or entirely revoke the trust during their lifetime. Trusts can also be modified using restrictions. The terms of the trust can limit the inheritance of the estate to only children, but have the ability to make provisions for future stepchildren. The trust may limit the use of property to the surviving spouse, but allow the property to be sold or transferred if needed.
Understanding the complexities of different types of estate planning can be a grueling process. For help navigating the intricacies of estate planning, please contact attorney Michael Rizo, who is more than happy to answer any questions or concerns you may have.