Typical Types of Wills

There are many different types of wills that can be prepared. We have listed below some of the more common types of wills that we prepare for our clients. We have explained each type of will listed and the typical situations in which each type is used. The actual choice of a will for any person depends upon that person's unique circumstances and the choice should be made with the assistance and advice of an attorney who practices law in the state where the persons resides. Nothing in this article is intended to be legal advice - it is set forth here for informational purposes only.

Simple Will - a will that contains no trust provisions. Although many clients tell us they want a simple will, we often find that when we explain what a simple will is, the client realizes that this is not what he or she had in mind. A simple will leaves everything outright (not in trust) to one or more persons. It is generally used where (1) the size of the estate is small enough that taxes are not a consideration and (2) there are no children or the children are all old enough that they do not need the protection of a trust. The simple will is generally not appropriate if the combined taxable estates of husband and wife are expected to be large enough that Federal Estate Tax may be a consideration now or in the future.

Will with Trust for Children - a will that contains trust provisions for children, persons with a disability or young adults who need the protection of a trust. The trust provisions are restricted to protective type provisions and the more complicated trust provisions that are intended to save Federal Estate Tax are not included in the will. This type of will is generally used where (1) there are children or other people who need the protection of a trust but (2) the size of the estate is small enough that taxes are not a consideration. This will is generally not appropriate if the combined taxable estates of husband and wife are expected to be large enough that Federal Estate Tax may be a consideration now or in the future.

Will with Disclaimer Trust - a will that contains optional trust provisions. Generally, the gifts under the will are outright rather than in trust. However, the will contains provisions for one or more trusts that become effective if the primary beneficiary makes a disclaimer - that is refuses to accept a gift under the will. In that event, the gift passes into the disclaimer trust. This type of will is generally used where the size of the estate is large enough that taxes may be a consideration but small enough that taxes may not be a consideration, depending upon all the circumstances that exist upon the person's death. This will is often appropriate if the combined taxable estates of husband and wife are expected to large enough that Federal Estate Tax may be an issue currently or in the future. Under the current law, the threshhold for a taxable estate has increased to $5,340,000 in 2014. The uncertaintly before 2013 meant that this type of will was the appropriate choice in many more cases,  because of the flexibility provided by this type of will.

Will with Marital Gift and Non Marital Trust (Non Marital Credit Shelter Trust) - a will with some type of trust that preserves the unified credit amount in the estate of the first spouse to die and with another gift or a trust that permits another part of the estate to pass to the surviving spouse free of Federal Estate Tax. This will may be appropriate if the combined taxable estates of husband and wife are expected to be larger than $10,680,000. The purpose of this will is to obtain the benefit of the Federal Estate Tax unified credit in the estates of both spouses and defer Federal Estate Tax, if any will be imposed, until the death of the surviving spouse. The changes that took place in 2006 and thereafter under the Federal Estate Tax mean that this type of will may no longer be the best choice for many married persons whose combined estates would have been subject to Federal Estate Tax under earlier law.

Will with QTIP and Non Marital Trusts - a will with some type of trust that preserves the unified credit amount in the estate of the first spouse to die and with a QTIP trust that permits the income from another part of the estate to be used by the surviving spouse with the principal ultimately passing to others (often the children) free of Federal Estate Tax after the death of the surviving spouse. This will may be appropriate if the combined taxable estates of husband and wife are expected to be larger than $10,680,000. It may also be appropriate if the combined estates are expected to be large enough that Federal Estate Tax may be an issue currently or in the future. The purpose of this will is to obtain the benefit of the Federal Estate Tax unified credit in the estates of both spouses and defer Federal Estate Tax, if any will be imposed, until the death of the surviving spouse. In addition, it permits a spouse to obtain these benefits without necessarily giving the surviving spouse access to any principal. It has often been used in second marriage situations - where the principal is ultimately to pass to the children of the first marriage. It may also be appropriate where Federal Generation Skipping Transfer will be a consideration.

Pour Over Will - a pour over will leaves the residue of the estate to a trust that exists independent of the will. For example, someone may have a pour over will which leaves everything in his or her estate to a living trust that he or she created during lifetime. Another example would be a pour over will that leaves everything to a trust created under his or her spouse's will.

Will with QDOT Trust - a will which contains a special trust which permits the deferral of Federal Estate Tax until the death of the surviving spouse where the surviving spouse is not a United States citizen. The marital deduction - a provision in the Internal Revenue Code that permits gifts to spouses to pass free of Federal Estate Tax - is not available to a non citizen spouse. Therefore, the will with QDOT trust is often used in that situation.

Copyright 2013-14  Marc H. Jaffe