You Need a Will. Seriously!
You May Not Think You Need a Will, But You Really Do.
Did you know every person who dies in this country has an estate plan? Either they prepared it themselves or they left it up to laws of the jurisdiction where they live. As you probably guessed, most Americans fall in the latter category and thus do not even have a simple will as part of their estate plan. You might believe, like most adults, a will is only for the rich and famous, and not the average person who has a far smaller net worth. On the other hand, you may think a will is entirely unnecessary since you have a trust, jointly owned property, or have named beneficiaries on your insurance.
So, do you really need a will?
The short answer to this question is “yes.” In fact, everyone who owns anything - no matter how little value it may seem to have - should have a will. This is because a will puts you in charge of directing others on your wishes and of the distribution of assets upon your death. Without a will or other estate plan - referred to as intestacy - you have no control and your jurisdiction’s laws and rules determine who gets what after your death. Even if you have a trust, jointly owned property, or have named beneficiaries on your insurance, a will is an important, even as a “backup” plan.
As a practical matter, the simpler your affairs are - typically, the fewer assets you own - the less complicated your will and overall estate plan is going to be. Surprisingly to most, it does not take much to complicate your estate. For example, if you have minor children, your will must name a guardian for those children in the event of your death. Likewise, if you have a relative who is disabled, elderly or without the financial sophistication to manage your assets after your death, a will allows you to name someone to watch over these assets for your loved ones in a special needs or supplemental needs trust. These are just two examples of the many things that can complicate your affairs and your estate plan.
But I Have Beneficiary Designations…
Many people believe if they have made beneficiary designations on life insurance policies, property deeds or retirement accounts a will is not necessary. While it is true those particular designations will ensure the people you elected will receive benefits or inherit those assets, the distribution stops there. If there are other assets that you own - such as a car, a china set, or jewelry to name a few - or if you would like to give part of your estate to a charitable organization, a will is essential to your estate planning needs.
Furthermore, when a person dies without a will, the estate goes into probate. Probate is a judicial proceeding by which the court decides the rightful heirs and distribution of assets of a deceased. Going through probate can be more time consuming and expensive without a will than it is with a will. This is because your will can waive certain probate requirements (like having the executor post a bond or obtain judicial approval to have an estate sale). At the same time, probate without a will follows the governing jurisdiction’s intestacy laws. These laws may result in a less-than-perfect split of assets and, leave many surviving loved ones unhappy. Consequently, for many reasons the creation of a will can fill the gaps of property assignment or plug holes in beneficiary claims on life or other insurance policies.
Only my family has drama, right?
Family dynamics also play a part in estate planning, something intestacy laws do not account for. Many people have blended families. There may have been second or third marriages. Older couples may choose to co-habitate after a death or divorce and never legally get married. You may have to treat your children differently on current accounts due to distance, and without a will, those assets will not be distributed fairly.
It is important to note a will can also include a no contest clause (I refer to this as the “greedy … clause”), reducing the likelihood of potential heirs arguing over its contents, something simply not possible if you do not make a will.
Take Control and Get Some Independence
Creating a will as part of your estate plan is primarily about passing your wealth to your loved ones after you die since a will only “works” after it has gone through the probate court process. It really is about giving you both independence and control of what happens to your assets after your death. Instead of leaving the distribution of your property to local intestacy laws, a will can put your wishes down on paper and direct a selected person to carry out your desires exactly as expressed.
If you have not yet prepared your will or did it more than five years ago, it is time to speak with an estate planning attorney. Give us a call at 301.892.2713 today and get in control of your future today.
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