So You Don’t Think You Need a Will?
If you’re young, healthy and busy building up your assets, an estate plan to distribute those assets might be the furthest thing from your mind. If you’re older, you might postpone estate planning simply because death is an unpleasant subject.
But whatever your age and life circumstances, you’re doing yourself and your loved ones a great disservice if you don’t prepare a Will—a document that directs the disposition of your assets , provides for a guardian of your minor children and provides other instructions upon your death.
What happens without a Will
If you haven’t written a will, you may be surprised to learn that the state in which you reside has effectively written one for you. Every state has statutes that will determine your heirs if you die “intestate”—that is, without leaving a valid will. States also have rules to decide the amounts heirs will receive. If you’re unmarried and have no relatives, the state will probably award your assets to itself.
If what you’ve read so far does not encourage you to speak with an estate planning attorney, there’s more. While the rules vary from state to state, if you die without a will and have children under age 18, the state will decide who will care for them—grandparents or siblings are typically the first choices for guardians. But if these parties don’t agree with the state’s ruling, a long, expensive and traumatic custody battle can ensue.
If you’ve been saving for the kids’ college education and you leave no will, there’s no guarantee that the state-appointed guardian won’t spend that money on something else.
Also a member of the “sandwich generation” may want to consider making provision for the care of an elder parent to avoid potential guardianship litigation.
Then there’s the matter of probate, the state court procedure that administers your estate. Probate applies whether you die with or without a will. When you die without a will the court decides who administers your estate. It can be an expensive, arduous process under the best of circumstances. If you leave no will, it can drag out even longer as potential heirs fight for their share of your assets. Meanwhile, the probate process itself can generate substantial attorneys fees that can reduce the value of your estate.
Also, if your intention is that 100% of your probate estate goes to your surviving spouse, you better have a will!! In Massachusetts a spouse by state law is entitled to only 50% of the probate estate.
A living trust isn’t enough
In recent years, the popularity of revocable living trusts has skyrocketed. With a living trust, you transfer assets into the trust during your lifetime. Upon your death, those assets go directly and immediately to the beneficiaries you’ve specified. Unlike a will, assets in a living trust don’t have to go through probate. A will is a public document; a trust, in contrast, is a private document and may therefore be more difficult to challenge. Another benefit of a trust is continuity of management. This allows your fiduciary (trustee) to continue managing the assets without the delays of probate and may provide liquidity to your estate.
