Estate planning begins with a will. Wills are a way for those who have passed on to have their voice heard and their final wishes carried out. Does everyone need a will? Yes. Almost every individual, regardless of their net worth, needs a will. In addition, having a will means that a person decides who gets their property when they die instead of the state. However, a will is about more than money or assets; it is about the disposition of property, guardianship of minor children, and the overall administration of an estate.
Who Needs a Will
Anyone who is married has children or owns property needs a will. The alternative to a will is allowing the state to control what happens after a person dies. A will determines:
- How property is distributed among heirs
- Who serves as guardian of any minor children
- How an estate is administered
Who Makes a Will
Every state has statutes that determines who can make a will. Typically, a person must be of a particular age and of sound mind. In addition, some states generally require that a will be a written document, signed and witnessed, before it is viable. A will can be drawn up by an individual, but due to complexities of some estates, it is best left to an attorney.
The Repercussions of Dying Without a Will
Intestate succession laws are put in place for those who die without a will in place. The state will then dictate who receives the estate’s property and in what proportion. As with any law, intestate succession laws cover the greatest number of people and do not take into account the specific wishes of the estate owner in regard to the distribution of property of the unique needs of the heirs. However, in most states, a spouse, parents, or even children will take priority under intestate succession.
For any minor children, without a will, the state will appoint a guardian under the probate court. These court-appointed guardians may or may not be a relative. If a person is concerned with who will take care of their children if they pass on before their children turn 18, a will is definitely recommended. Without a will, the probate court will appoint the guardian.
The probate court also appoints an administrator for the estate. This appointee must post bond in order to become administrator, causing additional expense to the estate. Usually, a person wants their property distributed differently than that state would distribute it. Gifts left to close friends, neighbors, schools, or charitable organizations are not taken into consideration by the state under intestate succession laws. If a person wants a particular asset or money to be given to any of these groups, a will must specify the person or group and the amount. The choice is clear; a person can draw up their own will or leave it to the state.
A Will Does More Than Distribute Property
Most wills have provisions for the distribution of property, but a will does much more than simple property distribution. A will can be used to:
- Name an executor to handle the estate’s business
- Name guardians for minor children and their property
- Create trusts for minor children or other young beneficiaries
- Pay bills left by the estate
- Forgive debts
- Create living trusts
- Designate beneficiaries
Other Estate Planning Tools
Living trusts, joint tenancy, and transfer on death deeds are other estate planning tools used to distribute property and avoid probate.
Joint Tenancy – Any property owned in joint tenancy will automatically pass, without probate, to the surviving owner when the joint owner dies. Unlike probate, setting up a joint tenancy is a simple and cost free way for a surviving spouse or partner to acquire real estate, bank accounts, vehicles, or other property of value.
Living Trusts – Also known as a revocable trust or inter vivos, a living trust places assets into a trust while that person is still living. After death, the designated beneficiaries receive the stated assets. A living trust is one way to avoid costly probate.
Transfer on Death Deeds – If a person does not want to transfer ownership of property until they pass, a transfer on death deeds is a popular option. Differing from a living trust, a transfer on death deed names a beneficiary upon the owner’s death without the asset going into probate. This type of planning can help to simplify end-of-life plans and help ensure that final wishes are carried out.
Even if a person uses these popular estate planning tools, a will is still needed to name an executor, a guardian for minor children, and a beneficiary for any assets acquired after the trust is created.
Unfortunately, family conflict can arise after a person’s death with regards to assets, guardianship, and final wishes. A will clearly lays out a person’s final wishes and reduces family conflict or speculation over what a person “would have” wanted.
Hurt feelings and allegations can fly with the high degree of emotions connected to the division of an estate after a death. With blended families becoming more common, the division of assets can be even more complicated. A will clearly states all final wishes and reduces conflict after a person’s death.
For example, if a person has children from a first and second marriage, they may want to clearly lay out a plan that includes distribution of assets for all children and the second spouse. Without a will, state law dictates the distribution of property and estate assets which can lead to uncomfortable situations and speculation of how a person would have wanted their estate to be distributed. Having a will with a plan can give a person peace of mind and help prevent infighting among family members.
The person who assumes the responsibility of settling an estate according to the terms of the will is the executor. The executor assumes many different responsibilities including completing an inventory of assets, filing petitions with the probate court, and managing estate assets. Choosing a trustworthy executor is one of the most important details when drafting a will.