What Is an “I Love You” Will and Is It Right for Me?
An “I love you” will is a common type of last will used by spouses. It’s a reciprocal will where the language is exactly the same in each spouse’s will, except that the names are flipped.
In a typical “I love you” will, each spouse leaves their entire estate to the other, then, if their spouse predeceases them, to their children. If both spouses die at the same time, their estate passes to their children.
This type of will is a simple and straightforward way to help avoid Family Malpractice™ and direct how the family’s estate should be handled after the death of one or both spouses. It’s a great choice for many families but not all. There are some important considerations, including how much you and your spouse trust each other.
Here’s what to know.
An “I Love You” Will is Not the Same as a Joint Will
While both types of wills are most often used by spouses or couples, there are some important differences between the two.
First, a joint will is one single document shared by two people. More importantly, a joint will is very restrictive. If one spouse dies, the surviving spouse is bound by the terms of the will and cannot change them, even after major life events like remarriage. (Some states allow for a joint will to be revoked, but the process can be difficult.)
In contrast, each spouse has their own distinct will with an “I love you” will. This is important, because it means an “I love you” will is much more flexible. A surviving spouse may keep the will as is (which would then leave the estate to the children), amend it, or replace it with a new will entirely.
At our law office, we don’t draw up joint wills and we don’t recommend them for anyone. An “I love you” will is the better choice between the two, providing more flexibility for the future.
However, it’s not right for everyone.
An “I Love You” Will Might Be Right for You If…
This type of will might be right for your family if you and your spouse:
- Have no children or only shared children (i.e., no stepchildren)
- Are on the same page about how your assets should be handled after death
- Trust each other
An “I Love You” Will Might Not Be Right for You If…
This type of will might not be a good choice for your family if you and/or your spouse:
- Have children from a previous relationship (where a “Brady Bunch” will for blended families is a better choice)
- Don’t agree on how assets should be handled after death
- Have large amounts of debt
- Have an addiction or overspending problem
- Are in a situation that could put the assets at risk
- Don’t trust each other
Trust is Key with an “I Love You” Will: Issues to Consider
On this last point, it can be difficult to face the reality that you don’t fully trust your spouse to make good choices regarding your estate after your death. But it’s worth thinking about what could happen.
For example, one client had us write up her will, but she didn’t leave her entire estate to her husband without restrictions. She suspected he might start dating after she died and give away some assets to his new girlfriend – and that’s exactly what he tried to do. Knowing him, she had used her will to protect some assets and keep them in the family. She used a certain type of trust to essentially “handcuff” him, allowing access during his life to some of her assets while preserving the rest for the children.
Another point to consider: An individual has the right to change their “I love you” will while both spouses are still alive. This could lead to an uneven situation where one spouse leaves everything to the surviving spouse in the will, but the other spouse doesn’t. The individual changing their will has an ethical obligation but no legal obligation to inform their spouse of the changes.
Finally, you must also trust that your spouse will not spend or squander the assets and leave nothing for your children, if that’s important to you. If your spouse has issues with addiction, gambling, or overspending, leaving them all your assets could not only be detrimental to your children, but to your spouse as well.
Maybe your spouse doesn’t have an addiction or spending problem but has a lot of debt or suffers from a serious medical condition that’s expensive to treat or is in a profession (like doctor) that’s likely to be sued. These are scenarios where the estate’s assets could be at risk of being spent with nothing remaining to leave to the children.
Ask yourself:
How would you feel if your spouse remarried or dated after your death and gave your assets away to a new partner or child(ren)?
How would you feel if you found out your spouse had changed their will without telling you, and your wills were no longer reciprocal?
How would you feel if your spouse spent everything on addiction, shopping, or debts, leaving nothing for your children?
There is no right or wrong answer to any of these questions. But you and your spouse should seriously consider them before deciding to move forward with an “I love you” will.
Do You Have the Right Will for Your Family?
You can see how the apparently straightforward “I love you” will can quickly become complex. This is where it’s helpful to work with an experienced estate planning attorney who can bring up potential issues and scenarios you might have never thought of. An “I love you” will is just one type of will, and maybe a different kind of will is a better choice for your family. An experienced estate planning attorney can help you figure it out.
Whether you’re getting a will for the first time, updating an old one, or simply want to review an existing one to ensure it still aligns with your priorities, we can help. Gem and his team at the Gem McDowell Law Group help individuals and families across South Carolina create wills and comprehensive estate plans that reflect each family’s unique circumstances and wishes while avoiding Family Malpractice. Schedule your appointment or free consultation at the Myrtle Beach or Mount Pleasant, SC office by calling 843-284-1021 today.
What a Will Can and Can’t Do
A last will is an important and powerful estate planning document. However, there are many things you cannot legally do through a will. Before drawing up your own will, you should know what a will can and can’t do so you can ensure your intentions are carried out.
Note that laws regarding wills vary from state to state. Speak with an estate planning attorney in your state if you have specific questions about what is and is not allowed under the law in your state.
A will can: Direct where assets subject to probate should go.
A will can direct where assets subject to probate go. Probate is the court-supervised process that settles the estate’s debts and taxes and transfers the remaining assets to the appropriate beneficiaries. Common assets subject to probate include:
- Real property solely owned or owned as tenants in common
- Bank and investment accounts without a beneficiary
- Personal property like cars, clothes, and furniture
Learn more about probate in South Carolina here on our blog.
A will cannot: Direct where assets not subject to probate should go.
A will cannot disburse assets that are not subject to probate, such as:
- Real property owned as joint tenants with rights of survivorship
- Payable on Death (POD) or Transfer on Death (TOD) accounts
- 401Ks, IRAs, and other retirement and pension accounts with a named beneficiary
- Life insurance proceeds from a policy with a named beneficiary
- Assets in irrevocable trusts and revocable living trusts
These assets are not subject to probate and go directly to the listed beneficiary or co-owner (in the case of assets owned jointly), bypassing probate altogether. Only if the assets are unable to go to the beneficiary or co-owner – if, for example, they predeceased you – would they end up going through probate.
A will can: Disinherit a blood relative.
A testator has the right to disinherit an adult child, sibling, parent, or any other blood relative in their will. (Whether an individual can legally disinherit a minor child depends on state law.)
A will cannot: Disinherit a spouse.
Spouses are protected under the law and are entitled to a portion of the deceased spouse’s estate after death, regardless of the provisions in the will. The only way to disinherit a spouse is to get their knowing consent in writing, and that must happen separately from the will.
In community property states, the surviving spouse is automatically entitled to the “community property share,” which is one half of the assets acquired during the marriage. Couples in these states may use a prenuptial agreement or postnuptial agreement to waive the surviving spouse’s right to the community property share.
Other states have something called “elective share,” a portion of the deceased spouse’s estate that the surviving spouse is entitled to under the law. This amount varies by state; in South Carolina, it’s one third. The only way to legally disinherit a spouse is for both spouses to sign a waiver of elective share. Read more about how to disinherit a spouse in South Carolina with a waiver of elective share here on our blog.
A will can: Put reasonable conditions on inheritance.
A testator is allowed to put legal, reasonable conditions on inheritance. For instance, a testator may say that their daughter will inherit the lake house when she turns 25 or that their nephew will inherit $50,000 if he earns a college degree by 30.
A will cannot: Put invalid conditions on inheritance.
A testator cannot make inheritance conditional on things that are illegal or that violate public policy. For instance, stipulating that a son will inherit his portion of the estate only if he marries someone of the same race or that a daughter will inherit $100,000 if she divorces her current husband will likely not be honored.
This is case-dependent and varies by state, so if you are considering including questionable stipulations in your will, discuss it first with an experienced estate planning attorney in your state.
A will can: Name individuals to certain roles.
The testator can name the people you’d like to be your personal representative / executor, guardian(s), and trustee(s). Naming people who are fit for the job and who have already agreed to take it on can save time in the probate process.
A will cannot: Obligate individuals to take certain roles.
An individual named in the will is not legally obligate to take on the role and may decline it. In that case, the probate judge will appoint someone else.
For this reason, it’s wise to talk with the individuals you choose to make sure they agree to take on the role and to include a back-up, just in case.
A will can: Help avoid Family Malpractice™.
Family Malpractice™ is a term we use for an individual whose actions or negligence have put their family in a bad legal situation. Most often, this happens as a result of not doing something that should have been done, such as not having a valid will drawn up. Dying without a will is one of the main causes of Family Malpractice™, as it can cause financial hardships, legal challenges, and family rifts for those left behind.
Getting a will is not just about carrying out your wishes after you’re gone, but about protecting your family and their future, too.
Get Help with Your Will and Estate Plan
Do you have a last will in place or are you relying on the government to decide where your assets should go after your death? If you live in South Carolina and you’re looking for help creating or updating a will, call estate planning attorney Gem McDowell. Gem and his team at the Gem McDowell Law Group help individuals and couples in South Carolina create wills and estate plans tailored to their circumstances and needs. Call 843-284-1021 to schedule an appointment or a consultation at the Myrtle Beach or Mount Pleasant, SC office today.
What Is a Will?
A last will and testament is arguably the single most important estate planning document you can have. Not having a valid, up-to-date will is a leading cause of Family Malpractice™ and can create legal, financial, and even personal problems for your heirs. If you’re an adult, you should have a last will, even if it’s a simple one.
But let’s start at the beginning:
What is a will?
A will is a legally binding document that directs what should happen to a person’s estate after death.
A last will is a legal instrument in which someone – the testator (or, sometimes, testatrix for a woman) – specifies what should happen to their estate and dependents after they die. In the United States, a will is subject to state laws, which vary somewhat from state to state.
A last will is entirely different from a living will (aka, advance directive or advance healthcare directive), which is a legal instrument outlining wishes for end-of-life care or care after incapacity. In contrast, a last will only comes into effect upon the death of the testator.
There are different types of wills, including simple wills, “I love you” wills, pour-over wills, and more. In a future blog post, we’ll cover many common types of wills.
What can a will do?
A valid, up-to-date will can ensure that your intentions for what happens to your estate and your dependents after your death are known and honored.
By making your wishes clear, you can help prevent litigation, legal quagmires, and fractured relationships that can result when someone dies either without a will (this is called dying intestate) or with an invalid, unclear, or out-of-date will.
A will allows the testator to:
Direct how and where certain assets in the estate will go.
A will only directs how to handle the testator’s assets that are subject to probate, the court-supervised process of paying debts and taxes and transferring ownership of remaining assets after a person’s death. Learn more about probate in South Carolina here on our blog.
Assets subject to probate include bank accounts without a named beneficiary, real estate not owned jointly with rights of survivorship, and personal property. Assets not subject to probate include life insurance proceeds, retirement accounts, and assets held jointly, such as real property owned as a joint tenancy with rights of survivorship. These assets bypass the probate process and go directly to the named beneficiary or co-owner.
If someone dies without a will, aka dies intestate, then state statute determines what happens to their assets and children/dependents. A valid last will is the best way for you – not the government – to direct what happens to your estate after you die. Read more about dying intestate in SC here.
Make arrangements for care of dependents.
The testator can name a guardian to take on legal responsibility for any minor children or other dependents (such as an adult child who needs lifelong care). The testator may also make provisions to create a trust for minor children or dependents and name a separate trustee to manage and oversee the trust’s assets.
Name a personal representative.
The testator can name a personal representative, aka an executor (or sometimes executrix, for a woman), to carry out the intentions of the will and close the estate.
And…
Depending on the testator’s unique circumstances, a will can also be used to:
- Create one or more trusts to hold assets for beneficiaries
- Make donations to charitable organizations
- Make arrangements for care of pets
- Make final wishes for funeral/cremation/celebration of life known
On this last point, we don’t believe a last will is the ideal place to include final wishes. For one, a decedent’s will may not be located and read for several days or weeks after death, by which time it’s too late. Also, last wishes may not be legally binding. If being cremated is important to you, read about legally binding pre-authorization forms for cremation in South Carolina.
A last will has several other limitations as well. In a future blog we’ll look at what a will can and can’t do; stay tuned.
Parts of a will
A will can and should be tailored to an individual’s circumstances. It may end up being simple and straightforward or long and complex, depending on the nature of the testator’s estate, wishes, and family circumstances. However, most wills typically contain the following basic sections:
Declaration of the testator. The testator gives his or her name and personal information (city and state of residence, marital status, and children), states that he or she has testamentary capacity, and states that the document that follows is intended to be his or her last will. Testamentary capacity is the legal threshold of cognitive ability the testator must meet in order to execute a valid will. This is where the phrase “being of sound mind” may occur.
Naming a personal representative / executor (executrix). The testator names someone to carry out the intentions of the will and close the estate. (Read more about the rights and roles of the personal representative in SC here on our blog.)
Settling debts and taxes. The testator directs how debts and taxes should be paid and may specify from which account or source.
Bequests/Gifts and distribution of assets. The testator lists exactly which assets should go to which beneficiary. The gifts may be specific (such as a particular diamond necklace or piece of real property) or general (such as $20,000). The testator may also specify which sources should be used, e.g., “$20,000 from my [XYZ] Bank savings account.” Alternatively, the testator may choose to divide the estate among heirs by percentages.
Note that in some states, a written memorandum can be used to bequeath personal property to beneficiaries; read more about the written memorandum below.
Appointing a guardian for children and dependents. If the testator has minor children or other dependents, he or she should name a guardian to take on legal responsibility for their care and a back-up guardian.
Signatures. The testator signs the will, often in the presence of two witnesses, though the exact requirements vary by state. Failure to follow state law here can result in the will being invalid.
Depending on an individual’s circumstances, the will may also contain sections on trusts and trustees, guardians for surviving pets, special requests for funeral or memorial services, and more.
Supplemental Parts of a Will
A testator may wish to make changes to the will sometime in the future. Having an entirely new will drawn up is one way to make changes. Alternatively, the testator may use a codicil or a written memorandum to document the changes. Here’s how these two supplementary parts of a will work and how they’re different:
Codicil. A codicil is a separate document that allows the testator to make changes to the will without drafting an entirely new will. It must be executed in the same manner as the original will (e.g., with two witness signatures) in order to be valid.
Written memorandum or personal property memorandum. Some states, including South Carolina, allow for a separate document in which the testator can bequeath personal items like family heirlooms or coin collections. A written memorandum cannot be used to distribute real property, cash, or securities like stocks and bonds. The written memorandum should be referred to in the will.
Get Help with Your Will and Estate Plan
Do you have an up-to-date last will? Having a current and valid last will is key to doing right by your family and avoiding Family Malpractice™.
If you live in South Carolina and you need to update your will or have one drawn up for the first time, contact estate planning attorney Gem McDowell of the Gem McDowell Law Group. He and his team can help you create a last will and comprehensive estate plan tailored to your circumstances, wishes, and needs.
Call to schedule an appointment or consultation at the Myrtle Beach or Mount Pleasant, SC office today at 843-284-1021.
What is Family Malpractice™, and Have You Committed It?
Have you committed Family Malpractice™?
If you’ve neglected your legal responsibilities regarding your family, then yes, you have.
What is Family Malpractice™?
You’ve heard of attorney malpractice, where an attorney’s misconduct causes problems for a client, and you’ve heard of medical malpractice, where a doctor’s error or negligence causes problems for a patient. Similarly, Family Malpractice™ is when an individual causes problems for his/her family members, usually because of failure to take action on a legal matter.
Problems that are created can be legal, financial, and/or familial in nature. I’ve seen a decedent’s heirs have to go through years of expensive and stressful legal battles over how to divide up assets. I’ve seen people take a huge financial hit because of how property was handled after the owner’s death. I’ve seen families torn apart and relationships permanently ruined due to Family Malpractice™.
While it’s not something you can be prosecuted for, Family Malpractice™ is something to avoid. You can easily do so by knowing some of the common pitfalls that put your family in peril legally and financially, and how to avoid these easily avoidable situations yourself.
When You Have Children but Have No Will, That’s Family Malpractice™
Do you know what happens in South Carolina if you die without a will, leaving behind a spouse and children? When I ask this question in consultations or at live, in-person seminars, most people believe that 100% of the deceased’s probate estate goes to the spouse. This is incorrect. By state statute, the deceased’s probate estate is divided evenly between the spouse, who gets 50%, and the children, who share the remaining 50% among themselves.
This sounds reasonable and fair. But, as straightforward as it sounds, this simple arrangement can cause a lot of problems, usually for the spouse. For instance, if a husband and father dies intestate (without a will), his half of the house is divided equally between his surviving wife and children. So his wife now owns 75% of the house and the children own the other 25%. If she’s not able to keep up with the house payments and wants to downsize, she can’t sell unless her children agree. They then have leverage and can demand more than the 25% of the sales price of the home, or else simply refuse to sell.
Who would do this to their own mother, you ask? Plenty of people, unfortunately. I’ve seen scenarios like these play out many times in my 30+ years of being an attorney. Situations like these can ruin a person financially in their later years and destroy family relationships irrevocably.
The situation becomes even more complicated in blended families where one or both spouses have children from a previous marriage. Imagine then, the surviving spouse may own 75% of the house and the children from a previous marriage own the other 25%. The children from the previous marriage are not required to cooperate with the surviving spouse. They can veto a sale, refinance, etc. They essentially control the property. That is not what the decedent wanted, and that decedent committed Family Malpractice™ with regards to the surviving spouse.
In short, the way an estate is passed along and divided up according to South Carolina law may not be what an individual wants, but if they die intestate, they don’t get a choice – and their heirs have to live with the consequences.
The solution: Have a will drawn up. This is vital if you have a family and especially if you have anything other than a small estate. Dying without a will can potentially create a lot of problems for your heirs that could have been avoided with a current estate plan.
When You Don’t Probate Your Deceased Mom or Dad’s Estate, That’s Family Malpractice™
The idea of a family home being passed down from generation to generation is something many people aspire to. Passing on wealth in the form of real property to your children, and to their children in turn, and so on, is a wonderful gift.
At least, it can be. It’s not uncommon for property passed on after death to become “heirs property,” which can cause a lot of problems for the heirs. This can happen when the surviving children of the original, now-deceased homeowner continue to live in the home but don’t go through the proper legal process to put the property in the new owners’ names. That is going through the probate process. If the same situation repeats for a few generations in a row, you can end up with literally dozens of people (typically, the grandchildren or great-grandchildren of the original owner) who all have legal claims to the property, all while the property is still technically in the original owner’s name.
Why is this such a problem? Because it’s very difficult to sell a house like this, when there are so many owners and a cloudy title. A buyer interested in the property risks having the deal fall through if one of the many owners decides they want more than their proportional share of the sales price or refuses to sell altogether. Getting the title cleared takes extra time and money. Meanwhile, the family members who own the house cannot sell and take the equity in the house, and they may be barred from accessing things that require clear title of ownership, like mortgages, loans, and government programs.
The solution: Ensure your deceased parent’s estate goes through probate. The probate process does not happen automatically; it’s something the executor named in the will must carry out. If there is no will, the probate court names an executor, usually a child or close relative of the deceased.
There are a few roadblocks keeping people from ensuring a deceased parent’s estate goes through probate. One is simply not knowing that it’s needed; they may incorrectly assume that the ownership of the house legally passes from the parent to the child(ren) without having to do anything. Another reason is an aversion to having to pay a lot to probate the estate. But in SC, probate fees are not very high. For instance, probate fees on an estate worth $1 million is just $1,845, which is paid out of the estate, as are attorney’s fees. Finally, some people want to avoid dealing with the government altogether. While this may be understandable, it’s not a good reason to avoid probate. Working with an experienced probate attorney you trust can help you and ensure that your estate is handled legally and fairly.
Read more about probate here on our blog.
When You Don’t Take the 1014(e) Step-Up in Basis, That’s Family Malpractice™
A step-up in basis occurs when the cost basis of an asset, like a home, is adjusted from the original cost basis to the current fair market value upon the death of the owner.
Let’s say your parents bought a house 20 years ago for $150,000, and when you inherited it upon their deaths, it was worth $350,000. If you don’t take the step-up in basis and proceed to sell it, you’ll have to pay capital gains tax on the difference, which is $200,000. If instead you do take the step-up in basis, and have the cost basis of the house increased to $350,000 (the fair market value at the time of your parents’ deaths), then you’ll only pay capital gains tax on the difference between $350,000 and whatever you sell it for in the future.
Depending on the value of the house, and how much that value has grown over time, that can mean saving a lot of money in taxes. When someone does not take this step-up in basis, it can lead to very large tax bills when the time comes to sell the property. There are a few reasons a person may fail to do so; they may not even know that the option exists, or they may mistakenly assume that it happens automatically.
The solution: Take the step-up in basis on property in an estate that you are executor of, or ensure that the executor of your parents’ estate does so. The probate attorney handling the estate can help you. As a probate attorney, my goal is to get the largest step-up in basis possible for my clients in order to reduce their tax liability in the future.
Work with Estate Planning Attorney Gem McDowell
Wills, probate, and step-up in basis are things that most people don’t think about because it’s outside the scope of daily life. But failing to take care of these matters is what I call Family Malpractice™, and it can lead to major legal and financial hassles in the future. Even more devastating, it can cause rifts between family members as they fight over assets in and out of court. Fortunately, these issues are completely avoidable. Work with an estate planning attorney and probate attorney to ensure your estate plan is solid and current and that you’re handling your deceased relatives’ estates correctly.
If you have questions about creating or revising your own estate plan in South Carolina, or you want advice or assistance handling the estate of a deceased relative, contact Gem McDowell at the Gem McDowell Law Group today. Gem has over 30 years of experience as an attorney and has helped countless families in South Carolina create estate plans, avoid mistakes, and fix problems. He and his team can help you understand and avoid committing Family Malpractice™ that can harm your family. Call him at his Mount Pleasant office today at 843-284-1021 to schedule a free consultation.
