Estate Planning / Wills

WHY DO YOU NEED A WILL?
By Daniel J. Pesachowitz, Esq.

Most people realize they need a will, but approximately 70% don’t have one. Many people feel that they have plenty of time to prepare a will and therefore put preparation off for a later date. Unfortunately, the consequence of such a decision can be disastrous to your family and friends. Anybody who owns property or has a minor child should prepare a will. A person who dies intestate (without a will) will lose the ability to decide who inherits his/her assets and/or choose who will become the guardian of minor children. Without a will, a person’s property will be distributed according to state law and a guardian for minors will be appointed by the court.

A will avoids costs and complications for your heirs after you die. Besides providing instructions about gifts of your property, your will can provide instructions for payment of your debts, selection of an executor for your estate, appointment of a guardian for your children, and directions for your funeral arrangements. A will lets you distribute your property in accordance with your wishes at a minimum of costs and taxes.

Disadvantages of Dying Without A Will

 If you die without a will you will have given up your right to decide who inherits your property. Your assets will be distributed according to state law, which might be quite different from your wishes. You also lose the ability to disinherit heirs. If you leave no will, you will lose the opportunity to select a guardian for your minor children and the ability to appoint a person to administer your estate. Court-appointed administrators and guardians may not be the family member or friend that you would have chosen to handle your affairs.

Dying without a will can be costly and may complicate the transfer of your property to your heirs. For example, your heirs may have to pay out of pocket costs for items like funeral expenses if there is no will stating that you want funeral expenses paid by the estate. In addition, legal proceedings that occur if you die without a will may delay the transfer of your property to your heirs.

Appointing an Executor

An executor is a person appointed in your will to ensure the proper administration of the will. One of the executors’s duties is to distribute property to your beneficiaries according to the will. An executor locates heirs, lists property, pays debts, and distributes assets to your heirs. A relative or a friend can serve as your executor. Before naming an executor, confirm that the person is willing to serve.

Appointing a Guardian

If you have children under 18, you should appoint a guardian in your will. Otherwise, if both parents die at the same time without such an appointment, a court will select a guardian to care for your children and manage their inheritance until they become adults. You can create a trust to control the property transferred to your children if you are concerned that your child might lack the maturity to handle their inheritance at age 18.

Funeral Arrangements

In your will you can include instructions for your funeral arrangements. However, you may wish to put these instructions in a separate letter. Give a copy of the instructions to your executor or a family member or a friend to avoid delays when you die. You can also include instructions about gifts of your body organs to hospitals for research or transplants.

Reducing Probate Costs/Taxes

Probate costs include court fees, bond premiums and the fees of professionals who assist your executor with the administration of your estate. Federal estate tax and state inheritance taxes may be deducted from your property before it is transferred to your heirs. A lawyer can help you reduce probate costs and taxes with estate planning tools like joint ownership, living trusts and lifetime gifts.

Conclusion

You should have a will if you own any property. A will lets you decide how your property will be distributed with minimum of costs and taxes. It is an opportunity to select an executor for your estate, guardian of your children, make funeral arrangements, and establish trusts and dispense with costly bonds. A lawyer can help you draft your will and explain the tax consequences. Your lawyer can also help you comply with the detailed requirements for a valid will, see that your property is distributed as you wish, and reduce estate taxes and probate. The legal fees are often less than the added costs and taxes that would result from dying without a will.

This article provides general information. Laws develop overtime and differ from state to state. This article does not provide legal advice about specific legal problems. Let us advise you about your particular situation.