Where There's A Will...
There’s an old joke that says: “Where there’s a Will…there’s relatives!” In reality, a Last Will and Testament, or a "Will," is a legal document that allows you to control aspects of your estate upon your death.
A Will is most commonly known for its ability to pass assets to your loved ones (or other intended beneficiaries). It can also be used to create testamentary trusts that take effect upon your death, as an alternative to an outright distribution to a beneficiary. These include trusts for minor beneficiaries, trusts to manage assets for beneficiaries who are adults but still under a certain age (e.g., 25, 35), and trusts for elderly beneficiaries who might need help managing assets. A Will can also be used to create a testamentary supplemental needs trust for a child with special needs to avoid the loss of governmental benefits for that child that would result from an outright distribution of assets from your estate. Under your Will you can also appoint fiduciaries you want to handle your affairs when you are gone, including an Executor who will oversee the financial and dispositive aspects of your estate, Trustees who will manage any trusts you create in your Will, and Guardians who will act as legal representative of any minor children you may have.
If you die without a Will, the state where you are domiciled at the time of your death directs the disposition of your estate pursuant to its intestacy laws. These laws vary from state to state, but almost always provide for distributions only to your next of kin. Although this dispositive scheme may reflect your wishes, there is a good chance that it will be far from what you want. Additionally, even if you want to benefit your next of kin, you may want to provide for distributions in trust, rather than outright distributions. Furthermore, for those with no spouse or children, your assets may end up going to a distant relative instead of a close friend or a charity. For those of you who don’t want Uncle Bob or cousin Jane to inherit your fortune – make a Will!
State laws also determine who the fiduciary administering your estate will be and if you have minor children, who their Guardian will be. Moreover, in many states if your minor child receives an inheritance from you that exceeds a statutory amount, it will be held in a trust administered by the court until that child is 18 years old.
Not only can the court legal procedure be cumbersome for the family, it can also be costly
, and it is likely that the fiduciaries you appoint will have to post a bond (which can be waived in a Will). What’s more, the idea that a child can inherit a significant sum of money at age 18 can be unsettling all on its own, not to mention a child with special needs losing much needed benefits because his or her inheritance was not properly structured.
Making a Will also allows you to make specific bequests of property or cash to specified individuals or to one or more charities. You can also name contingent beneficiaries if the beneficiary you name does not survive you. Making a Will allows you to put together a plan that is consistent with your wishes. With the intestacy law your wishes are not taken into consideration.
Having a Will can streamline the administration of your estate, provide you with greater control of your assets, and reduce family fights after you are gone. Wills are not just for the wealthy. Regardless of how much or how little money you have, your wishes are important and should be documented. So make a Will! Your family will thank you!