subject: Having A Will Or Not - What's The Difference [print this page] It's easy to put off making your willIt's easy to put off making your will. Thinking about your death is depressing and, besides, you're not sure of all that you have and what happens to it anyway. This article introduces you to just these issues.
Quite simply, both property you own that you hasn't been arranged to automatically go to someone else at your death and your minor children must be formally disposed of or accommodated for when you die. That's the obligation of the state. The actual process for doing this is called the probate process which is carried out by your county's probate court.
The probate court will generally abide by whatever instructions you leave about that how to dispose of that property and to whom to transfer the guardianship of your minor children. Those instructions make up your 'Will' - your final testament. But if you die without a will, called 'dying intestate', your state has both a right and rules to make its own, i.e. the probate court judge's, disposal and accommodations for them.
So let's first see more specifically what your instructions - your Will - should include. After that we'll see what your state might do if you don't make a Will.
*Your Will's purpose:
When you 'make a will' you're legally declaring who - either persons, organizations, or trusts - is to receive your property after your death and who is to be guardian of your children if you are their guardian now. This declaration is really a set of instructions. So you'll also have to name an executor or a personal representative to carry out your instructions and fulfill all debt and tax obligations your death creates - a process called 'settling your estate'.
If your instructions include setting up a trust created by your death - a testamentary trust - to receive some of your estate, you'll need to designate who should be the trustee of that trust to carry out the trust obligations - the instructions you make for the trust. And, not least of all, if you have minor children at your death, you'll want to designate who should be guardian to them.
*The property that comes under your Will:
It's important to realize that your will only controls the transfer of property that's in your name and which remains in your name at your death - i.e. sole ownership property. This property is distinguish from property that's transferred automatically at your death by virtual of how it's titled or if it has a beneficiary attached to how the property is held.
Real estate is often titled under 'joint ownership with right of survivorship'. This means the joint owner - if alive at your death - will automatically become full owner of that property. If the titleship doesn't imply that, then your sole owner - like tenants in common- and that property, or your share of it, will go through the probate process.
Beneficiary designations on bank accounts, life insurance, IRAs, and the like, provide for automatic transfer of those account values to those beneficiaries. Such accounts bypass the probate process.
In addition to whom you designated as receivers (beneficiaries) of your probate property, you can designate the amount or percentage of that property each should get. Important here is that you can specifically exclude a beneficiary - such as a child or a spouse - from receiving some or all of property if you want, although your state may impose a limit to this exclusion.
*Guardianship:
Clearly, your choice of who shall be guardian of your minor children is a critical choice for you - and for your children. Both that choice and how you arrange for financially bequeathing to them now and later when they are adults is critical. Guardianship issues are a good reason to get a will drawn up.
*Obligations of debt and taxes:
The probate process requires that debts and state and federal estate taxes be disposed of before distributing your probate property. If your estate is sufficiently large, it's to your beneficiary's advantage for you find ways to minimize the loss of some of your legacy to them from unnecessary taxation.
The 'not having a Will' alternative:
Now that you know what your will must address, you can also see that your state will address those same issues if you won't by dying intestate - without a Will. In that case, your state will rely on its own rules for distributing your probate assets. Depending on your state, it might distribute half to your spouse and the other half split up among your children. Your minor children will be given their full inheritance from you upon turning 18 or 19 years of age.
Since you didn't designate who should administer your estate, the probate court judge will choose who will do all that. And it'll choose who will be the guardian of your minor children. It has every right to pick whomever it wants - no matter the cost, fees, or time involved to accomplish it all.
You would probably be very disheartened about they way the court - without your Will - will carry it all out. You can save all those who rely on you a lot of heartache and tribulation by making a Will that will serve them better than the state will.
