Why You Need (At Least) A Will
Many people think a Will is only for those who want to set up Trusts or save taxes. While those are major benefits, the primary reason for making a Will is to leave your property and your assets to those you care about, and in the proportions you choose.
If you die without a will, property that you die with in your name alone (with no beneficiaries) will be distributed among your blood or adopted relatives, but in a very specific order and maybe not the way you prefer. If you are survived by:
spouse and children, your spouse takes the first $50,000 and one-half of the balance of the property, and the children share the rest,
spouse but no children: spouse takes all.
children, no spouse: children take all.
a parent(s), no spouse, no children: the parent(s) take all.
parents' children (your siblings) but none of the closer relatives listed above: the parents' children take all.
one or more grandparents or their descendants, but none of the closer relatives listed above: half goes to the maternal side and half goes to the paternal side (but not including second cousins if you have any first cousin on either side).
[Note: Where "descendants" includes a mix of generations, living children take a full equal share, and children of predeceased children then divide equally the combined shares of all their deceased parents.]
If you die without a will and leave young children. If your children are under 18 years old at your death, a court-appointed guardian will be required to manage your child's share. Although the court probably would appoint your spouse as guardian, depending on your family situation, a bond may have to be posted. Payment of the bond premiums will cost money. If any money has to be used to pay for your child's education, clothing or living costs, prior approval of the court is necessary. The court also requires annual accountings of income and expenses. In addition, investment of the funds by the guardian may be limited as well. If the guardianship lasts for any length of time, the child's funds may not grow at an acceptable pace. All these problems could be easily avoided with a properly drafted Will and other estate planning documents.
If you and your spouse should die at or about the same time, it is important to not only include provisions for a guardian of the property of any minor child, but also to name a guardian of the minor child's person. A guardian of the person is given custody of the child while they are a minor.
Naming an Executor. Your estate plan is very personal. It is tailored to your own needs. You name those you trust and want to handle your property as Executors. An Executor can be a spouse, an adult child, a friend, or even your lawyer or a bank or trust company that specializes in the handling of estates. The choice of an Executor is yours, only if you make a Will. In your everyday life, you realize the value of having qualified people help with your affairs. This is just as valuable and important after you die.
Making the best plan takes knowledge and expert advice. Do you know that property held jointly with another may not be distributed by a Will? Or that life insurance may or may not be distributed by Will depending who is named as beneficiary? Or that the same can be said of individual retirement accounts, pension plans and other assets? Or that a surviving spouse has a right to a car and some other items, and to a large share of the property no matter what your Will may say? The best plan recognizes that the best Will is only one part of the total plan for the distribution of your property.
If you plan properly and have your plan reviewed periodically, you may lower or eliminate your tax burden and leave more to your beneficiaries. Before you make a Will, you should also know how estate taxes affect you. The federal and NY estate taxes frequently change as the result of various tax reform acts, so you may not be up-to-date with these complex and always changing laws. Also, you may be unaware that you can choose which of your beneficiaries pays the estate taxes. If you plan properly and have your plan reviewed periodically by an attorney, you may be able to plan your estate in ways that can lower or eliminate your tax burden and leave more to your beneficiaries.
Discuss your estate plan with an Estate Planning attorney. To have the best plan for yourself and for your beneficiaries, call us and set up a free consultation to discuss your Will. Making a Will is one of the wisest investments of your life, and the advice of an expert may prove invaluable.
