Will Contracts: What You Need to Know

The world of estate planning is a complicated one, and the sheer number of tools available to those creating, enforcing, and challenging a will or trust can be overwhelming. One of the goals of this blog is to break down some of these tools for you, so that you can go into your own estate planning journey with a foundational knowledge and an idea of what might work for your individual circumstances. In today’s blog post, we cover the will contract, reviewing its purpose, its nuances, and the reasons you might want to ask your Colorado estate planning lawyer if it is right for you.

A will contract is an agreement made between two individuals (most frequently made between spouses) that dictates how each person will distribute his or her assets. During marriage, money becomes comingled, making it difficult to differentiate between each spouse’s assets as the marriage goes on. With the will contract, each spouse commits in writing to a specific arrangement for his or her assets upon death. That way, for example, if one spouse comes into the marriage with more assets than the other, he or she commits to giving that same percentage of assets to his or her heirs after death, as opposed to giving a smaller percentage after the couple’s assets have become comingled over time.

Take an example. If a husband and wife have children from another marriage, and each spouse wants to make sure his or her children are protected, the couple might consider making a will contract. Without a will contract, the following scenario could occur: the husband passes, the wife legally inherits the husband’s assets, and the wife then fails to honor the husband’s wishes by giving money to his children. She instead inherits the assets and gives the money directly to her children, bypassing his children entirely. If the pair had a will contract, the wife would be obligated to give a certain percentage of her husband’s assets to his children. She would have signed an agreement binding her to look out for them, even after her husband is gone.

There are many provisions necessary in a will contract, including: how future disagreements will be handled, interpretation of the document, changes proposed to estate planning documents, and what (if anything) will cause the contract to expire. Because the will contract necessarily contains many different pieces, it is important to hire a thorough, detail-oriented estate planning attorney to make sure you include all of the essential provisions.

Will contracts can make sure you, your family members, and anyone you want to provide for in the event of your death is taken care of according to your wishes. It also serves as a tool for you and your spouse to openly communicate about how you want to divide your assets when you are gone. Many times, couples creating a will contract hire the same team of attorneys to represent them both; in this way, the process can unite couples instead of dividing them, providing them a way to discuss their financial goals thoroughly, honestly, and with the expert opinion of an experienced estate planning attorney.

Unfortunately, will contracts can, at times, be difficult to enforce. There are some courts that have decided that will contracts are ultimately unreliable and unenforceable, meaning these courts will rule on the division of assets regardless of what the will contract says. At the same time, other courts have issued opinions reinforcing the importance of the will contract, making it safer to have the document in case it becomes necessary.

Additionally, like any other document, will contracts are up for interpretation. Without the right attorneys, it can be easy to leave important details out of a will contract and therefore leave certain terms ambiguous in the process. For example, do you want an arbitration clause in your will contract? Do you want to waive your right to a jury trial in the event of a dispute? These are key terms of the will contract that you should consider, and without them, the contract could crumble under difficulties with interpretation.

It can also be expensive and time consuming to create a will contract, especially if you and your spouse anticipate having significantly different goals and needing different attorneys. You might decide that your prenuptial agreement, postnuptial agreement, or estate planning documents sufficiently cover your wishes and communicate how your money should be passed along. There are times when adding another document to the mix can add confusion, and it is important to make sure your documents do not conflict with each other as you move along through the process.

Ultimately, the decision about whether to get a will contract is an inherently personal one. There are always multiple ways to navigate the estate planning process, and the best route for you will always depend on your personal finances, relationships, and goals. To make an informed decision, we recommend you speak with a Colorado estate planning attorney that can walk you through your options and recommend a path that will help you make sure your loved ones are in good hands after you are gone.

If you have questions about your estate planning process, contact the Braverman Law Group today. At the Braverman Law Group, we understand that beginning to think through tools such as a will contract can feel daunting, and we are committed to standing by our clients through every step of the process. Our Boulder, Colorado lawyers are experts in all things estate planning, and we are proud to offer personalized, thorough, empathetic representation for our clients that helps them achieve their financial goals and feel peace of mind at the plan they have put together.

For a free, no-obligation consultation with one of our estate planning attorneys, give us a call today at (303) 800-1588. If you prefer, you can also fill out our online form to tell us about your legal issue and have an estate planning attorney reach back out to you as soon as possible.