What is a Will?
A will is a written document which provides for the disposition of a person’s property after death. It may be handwritten or typed. In North Dakota, any person of sound mind, 18 years of age or over, may dispose of his or her property by will.
Two types of wills are allowed under North Dakota law:
1. A formal will must be in writing and dated and signed by the testator (the person making the will) and at least two competent witnesses. At the time of the witnessing of the will, the testator must declare that the instrument is his or her will. The testator must either sign the will in the presence of the witnesses or acknowledge to them that it was signed by him or her. The witnesses must sign in the presence of the testator. It is necessary to comply strictly with all these technical formalities of executing a will.
2. A holographic will is written entirely by hand, dated, and signed by the testator in the handwriting of the testator. It does not need to be witnessed, however having it witnessed may later help prove its authenticity.
A will does not go into effect until the testator’s death. It may be revoked or changed any number of times before that. An amendment to a will is called a codicil. A codicil must meet the same requirements of execution as a will.
A person who has died and left a will has died testate. Anyone who dies without making a will has died intestate.
A personal representative is the person designated in the will by the testator to carry out the provisions of the will. When a person dies intestate, the court must approve someone to act as personal representative.
Why Have a Will?
The only way that a person can exercise any control over his or her estate after death is by making a will while living. Young people often have a limited amount of property, but prepare wills in order to control the orderly disposition of their property and to protect the interests of their minor children. Through a will, parents can designate who they prefer to be the guardian of their minor children. This is an important right that is lost if the parents do not have a will. If parents have a substantial amount of property, it is important for them to name someone as trustee of the assets in their estate for the benefit of their children. In that manner, they can attempt to protect the best interests of the children, as far as their property is concerned.
Through a will combined with estate planning, people can plan the handling of their estates in ways that avoid estate taxes as much as possible, while still carrying out their purposes and objectives. Through a will, and only through a will, people can provide for bequests to churches and charities. The law designates who will get the property of those who die without a will. By having a will, people can control the distribution of their property to other beneficiaries and heirs. They can leave property to persons who are distant relatives or who are not relatives and would not otherwise be eligible to receive property. However, a surviving spouse may be entitled to inherit, or receive property, free and clear of a will, under certain circumstances.
When Should a Will Be Changed?
A will should be reviewed whenever a significant change in personal and financial circumstances occurs. This is especially true if a beneficiary (a person who receives property or benefits under the will) dies, or if there is a change in the testator’s marital status. As a general rule, a will should be reviewed at least every 5 years.
What if a Person Has No Will?
When a person dies intestate, the court must determine who will be the guardian of minor children of the deceased. North Dakota law provides who will receive the property of the estate and it can get quite complicated to figure out. Here are some of the variations for what the surviving spouse receives when there is no will:
1. The entire estate if no children or parents of the deceased are alive or all of the deceased’s children are also children of the surviving spouse, and there are no other children from different relationships.
2. The first $300,000 plus three-fourths of the remaining estate if the deceased has no children, but one or both parents of the deceased are alive. The surviving parents receive the remaining onefourth.
3. The first $225,000 plus half of the remaining estate if all of the deceased’s children are also the children of the surviving spouse, but the surviving spouse has children from a different relationship.
4. The first $150,000 plus half of the remaining estate if the deceased only has children from a different relationship.
What is Probate?
Since a deceased person cannot hold title to property, our laws provide for the winding up of the business affairs of a person who has died, including the payment of bills and creditors’ claims, and the distribution of property, plus arrangements for taking care of the best welfare of the members of the family who were dependent upon the deceased person. This process is called probate. The North Dakota statutes set forth the orderly manner in which the affairs of the deceased person are terminated.
Estate Taxes (2017 Tax Cuts and Jobs Act)
Estate taxes are levied on estates above a certain amount, which is in constant fluctuation. The current tax rate for estates is 40%. In 2017, the Tax Cuts and Jobs Act doubled the estate tax threshold and it includes annual inflation increases, but the law is scheduled to sunset back to pre-2017 values on January 1, 2026. The following is the current schedule per person:
• 2024: $13,610,000
• 2025: TBD ($13,610,000 plus inflation rate)
• 2026: Approximately $7,000,000 (half of the 2025 rate and adjusted for inflation)
Estate taxes are complicated and there are many tools to save on taxes if your estate is above the estate tax threshold. It is recommended you contact your estate planning professional for the most recent developments. In any event, all property passing to the surviving spouse or a qualified charity is exempt from estate tax.
N.D. Cent. Code §30.1-04-02
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