You know you should have a will or some type of estate planning documents, but do not beat yourself up if you have not yet checked that task off of your to-do list. Forty percent of people 45 years and older do not have a will. The only way to have some control over what happens after you die to everything you have worked all your life to accumulate is to have a will.
Even if you have a living trust, you still need a will as a safety net for any assets that you do not transfer to the trust. At Thienel Law LLC, we draft wills and other estate planning documents so you can protect your loved ones.
Why Everyone Needs a Will
Many people live paycheck to paycheck, do not own a house, and do not have investment accounts. They might think they do not need a will, but random assets have a way of turning up without notice.
- You could inherit from someone, even just a few thousand dollars.
- You might have a life insurance policy through your employer, credit card, or car insurance.
- Someone could injure you, and you might die from those injuries. Your estate would sue the person who caused your death and collect a wrongful death settlement or judgment.
- You might have other assets you forgot about, like a paid-up insurance policy your grandma bought when you were little, savings bonds you received as gifts, or other things.
If you do not make a will, you will have no say on who gets your assets. The state will give them to whoever the laws of intestacy (dying without a will) say for your state. So, your windfall could go to someone you cannot stand, and the people you would want to get this bounty will be left out in the cold.
Married people think they can get by without a will because they have joint accounts. Granted, these accounts will pass automatically to the joint owner when you die, but what happens when you get unexpected assets? And plenty of married people have separate or individually-titled property.
What a Will Does Not Cover
Your will does not control who gets your life insurance proceeds unless the policy names your estate as the beneficiary. Any bank or investment accounts you have that transfer on death (TOD) do not go through your will, and neither do joint accounts. Assets that you transferred to your trust pass through the trust, not your will.
What a Will Covers
The assets you identify in your will pass according to the terms of your will. Any assets you have that do not fall into the category of “what your will does not cover” will pass through your will. Your will is a “catchall,” meaning that if something is part of your estate, your will governs its distribution.
Your will protects you even if you have a trust. No matter how diligent you are about transferring your assets into your trust, somethings will slip through the cracks. Your last paycheck, a refund or reimbursement are just a few examples of assets you might have that did not make it into your trust.
What Happens When You Die with a Will
The person you named in your will files the will with the probate court. The court appoints that person, if qualified, as your executor. The judge decides as to the validity of the will. If the judge finds the will to be valid, then your personal representative starts the process of rounding up your assets, giving notice to potential creditors, preparing reports, paying your estate’s bills and taxes, and eventually paying your net estate (after paying creditors and last expenses) to the people you named in your will.
You should note that you cannot “cut out” certain people, like your spouse or your minor children in your will. Your state has laws about who must get part of your estate, regardless of what your will says.
What Happens When You Die Without a Will
When you die without a will, the court will appoint someone to administer your estate. The administrator is entitled to a fee as outlined in your state’s laws. There will also be court costs. The administrator will do many of the same tasks a personal representative would do if you had a will. The main difference is that the court will distribute your assets according to the rubric set forth in your state’s laws, which might leave some of your loved ones high and dry.
Joint or Separate Wills for Married Couples
We usually do not recommend joint wills. A joint will with your spouse will lock you in to the terms of that will for the rest of your life. Let’s say that your spouse predeceases you and you live another 30 years. A lot of life can happen in 30 years. There may be other people you would want to add to the list of those who will benefit from your generosity, but you will not be able to do so if you have a joint will.
Where You Should Keep Your Will
You should keep your will in a safe but accessible place. Many people make the mistake of putting their will in their safe deposit box. If you do this, someone may have the expense of going to court and getting an order to open the box to get your will if they do not already have access to the box. If you included final instructions, such as your wishes for your funeral and burial with your will and other papers in your safe deposit box, your wishes would not be honored because the funeral and burial will be long gone by the time your loved ones can access your will.
One alternative is to keep a copy of your will in your home and tell a trusted person the location. Make sure your family knows the name of your lawyer, so they can get a copy from his office if they cannot find your copy. However, if choose to keep your will at home and it cannot be located at your death, the court will assume you revoked your will by destroying it negating your efforts in preparing a will.
Another alternative is to have your lawyer safely store the original copy of your will making sure your family knows the name of your lawyer. This prevents the will from being lost and the court presuming you intended to revoke your will when indeed you did not.
When You Should Update Your Will
Whenever you have a significant life event, such as the birth of a child or grandchild, a marriage or divorce, or the death of someone who would be a recipient under your will, you should review your will and update as appropriate. Since there can be many other reasons to update your will, you should review your will with your lawyer about every three years even without major life events. We can also advise you about other estate planning options, such as a durable power of attorney for financial or healthcare decisions. Call us today so we can get you started on the path to financial planning security.
Experience You Can Trust
Estate issues like drafting wills and trusts are complex, and many of us fail to properly address the numerous issues that can have an impact on our loved ones in the event of our incapacity or death. Wills and trusts attorney Steve Thienel is dedicated to assisting his clients throughout the DC Metro area. Contact Thienel Law, LLC today and let me assist you with your estate planning or administration needs.