Why You Need a Will, Now
There are many many horror stories about what happens when you don’t have a will. It boils down to your state’s probate court deciding what happens with your assets. Sometimes, these decisions are based on state laws that are already in existence. For example, let’s say you are separated from your spouse and have minor children. Three BIG issues. One, most states name the spouse as the beneficiary of your estate; meaning someone you were not on good terms with may get all or a major part of your estate. Some states by default, will split assets between spouse and kids- but not necessarily equally. Two, without a will guardianship isn’t identified. Even if you have a verbal agreement with family or a close friend, that is not legally binding. The state speaks where you did not. You need a Will. Three, any inheritance for your minor children is handed over to a state appointed representative for the children. Even if Auntie (with whom you made the verbal agreement) contested, the court could still rule unfavorably.
Adults need a will. You need a will.
Terminology & General Overview
A Will is a legal document that determines what happens to your estate, if you were to die- when you die. In addition, many include a guardianship clause for children under 18 years of age. If you die without a Will or there are assets that the court deems not covered by the will, then the court handles allocation/distribution. This would be handled by Probate Court– the part of the judicial system that handles those types of things.
You would be the Testator. Your Will identifies someone to be the Executor or Personal Representative; and be a joint role (i.e. your spouse and your family attorney). That Executor is responsible for carrying out your wishes concerning your estate (your assets); who gets what and how much. Those recipients of your assets are called Beneficiaries. Life insurance policies and investment accounts often name beneficiaries within those accounts so are not part of your estate. An exception would be, if the beneficiaries preceded you in death and the beneficiary information was never updated. In that case, those assets could fall to your estate and would be covered by your will. Otherwise, your Will normally covers all other assets that belong to you. A Guardian is also named for your children and that guardian receives custodial rights to care for your children. Any assets named for minor children, will normally go the guardian on their behalf. Life insurance
money (since not covered by the Will), if left in the name of minor children, won’t be paid out until those children become adults.
How to Get Your Will Started
When you are considering what types of things are included in a Will, consider: homes, land, bank accounts, family heirlooms, contents of safe deposit boxes, jewelry, and any other items. It can even include your business.
You can write your will yourself or use one of the many “do-it-yourself” forms or sites. This can certainly work for you. But to increase credibility and the validity of your Will, you should acquire the signature of two witnesses (who could be called to testify to the validity during probate) and a notary (as required by some states). Even better would be to hire a Trust and Estate Attorney. Validity of a Will has to be determined. If the Will passes the test, it is turned over to your Executor to execute. If it is determined to be invalid, it is totally disregarded and the court appoints its own Executor and determines how they deem best to distribute your assets. I don’t say this to scare you, but it is important that you do your due diligence or hire someone who will.
Your Will may never need to be updated, but you should review it annually with your other financials or at least every couple of years. There may be something that you notice needs to be added or changed. There is a legal way to do that, so make sure you follow your state guidelines. You cannot just edit your current Will.
By owning responsibility to getting a Will in place, sooner than later, you can avert a potential mess. In addition to grief over your death, without a Will, your loved ones would endure additional emotional trauma over who should get what and possibly repeated visits to Probate Court. In addition, the court may force the sale of your family home, family land, and other precious possessions, so that the money can be split between those these deem as beneficiaries. Retaining your family legacy and inheritance is not their priority- only in as far as how to make sure each beneficiary gets their “fair” share. If your estate is not in double digit millions, your family won’t pay estate taxes. If it is over that, your family may. Some of the sale of assets could be used to pay estate taxes if estate taxes are due. The cost of going through probate could raise the taxes due.
Conclusion
You have a chance to do the responsible thing and get a Will. This allows you to be clear about what your wishes are. You (not the state) get to determine who gets guardianship of your children, who gets what, and how much. You can even give to charities or other organizations.
Don’t procrastinate on this. Something could happen anytime and your children and other loved ones would ultimately be the ones who pay.
