It can be hard to think about how your assets should be split among your heirs after you die. Many people first encounter the complexities of the legalities involving estate planning, will construction, and division of assets only after a loved one has passed. This emotionally charged time does not allow for the most solid grasp of how wills and inheritance laws function.
This guide seeks to describe the functions and purposes of wills, and also addresses other aspects of succession law, such as what happens if one dies without leaving a will, and ways your assets can be transferred to another outside of the probate process.
A last will and testament is a formal legal document that you create to express your wishes not only about how your assets should be distributed to your dependents and other beneficiaries you choose, but also regarding how your affairs should be handled and your estate managed after your death.
One of the most vital functions wills serve is to give the probate court, the authority that oversees the remaining legal affairs of deceased individuals, a blueprint of your wishes that they can then follow. Since they are so important, having a will that is legally valid and as specific as possible can make things significantly easier for your friends and family to settle your last affairs.
In legal jargon, someone who dies without leaving a will is said to have died "intestate." Intestacy laws vary by state, but they all provide a default set of rules for how an individual's assets should be distributed if they die without a will. These laws are designed to be efficient in providing a workable framework for distributing the deceased's assets amongst the spouse and children, with more distant relatives inheriting only if there are no immediate family members. However, they often operate such that the decedent's wishes are not taken into account.
How you create your will can impact whether it is accepted by the court. Most states require that modern wills be typed, signed by a certain number of people who are not related to the person making the will, and sometimes notarized. While other types of wills exist, their legal validity can be called into question. For example, if you create a handwritten will, legally referred to as a "holographic will," it may not be recognized as valid by the courts. However, some states may accept a holographic will if it was created before the legislation prohibiting them was passed. Even if a handwritten will is legal in your state, you still need to make sure it meets all the other requirements, like having the right number of witnesses, and in some states, being notarized as well.
If you want to go a more convenient or modern route, consider creating an online will. Some online businesses will allow you to create your will using a will creation template. This is a more convenient way to create a will, but you should keep a physical copy because online wills have all of the same vulnerabilities as any other file.
While your estate's assets will go through probate whether or not you have left a will, there are certain assets that can be structured so that they are not considered part of your estate and will pass outside of probate.
For example, you can establish a joint account where you can place assets such as property, bank accounts, business interests, or stocks. When you pass away, these assets will be excluded from probate and instead be passed on to the surviving joint owner(s). You can also place such assets in a payable-on-death (POD) account. These accounts provide that upon your death their ownership will pass to an individual or entity of your choosing.
Your final will and testament can do more than determine the disposition of your belongings after your death. Generally, if you are married, your spouse will inherit sole custody of your children upon your death. There are, however, certain contingencies that a will can provide for. For example, a will can name a guardian if your spouse has already died, if you and your spouse die simultaneously, or if you're divorced and your ex-spouse doesn't want to or can't take care of the kids. In such cases, a provision assigning guardianship in your will can be essential for ensuring that your children are entrusted to a guardian who was selected in advance and is able and willing to raise and care for your children.
There is also something called a living will (also referred to as an advance directive), which you can use to express your preferences regarding end-of-life care or what should be done in case you become physically or mentally incapacitated, such as whether or not you want to be resuscitated in the case your heart stops, or whether you want to be moved to an old-age home in case you come down with dementia.
It is important to note that a living will is different from a traditional will, which only takes effect upon your death and deals with the distribution of your assets. A living will, on the other hand, takes effect while you are still alive and deals specifically with medical and end-of-life care decisions. Furthermore, a living will should not be confused with granting a power of attorney to someone else (also known as a healthcare proxy) because the former sets forth your choices in advance in case you become physically or mentally incapacitated or otherwise unable to make those decisions, and the latter is a different type of legal document that gives someone else the power to make those decisions on your behalf in such situations.
Without clear instructions in a will, family members may disagree about how assets should be distributed, leading to disputes that can be emotionally draining, costly, and divisive. Furthermore, the default beneficiaries under your state intestacy laws may end up being very unfavorable to those you would actually like your assets to pass to upon your death.
For example, state intestacy laws vary regarding who may be considered an heir. In some states, only a surviving spouse and children are considered heirs, while in others, parents, siblings, and even grandparents may be included. Other states have intestacy laws that are less favorable toward adopted children or those born out of wedlock.
Another issue is that some state intestacy laws do not recognize common-law marriages, e.g., ones where two partners are not formally married but live together as if they were. And even in states that do recognize common-law marriages, in some of them, a common-law spouse will be entitled to less of an inheritance than one who was formally married.
Thus, if you die without a will and have no beneficiaries that are legally recognized as heirs under your state's intestacy laws, your friends, other relatives, and unmarried spouse will be entitled to nothing, and all your property will instead be absorbed by the state. In the most extreme cases, this can mean that if you die owning your own home and your partner's name is not on the deed, they may be forced to leave the house you both shared. This was one of the key motivations for the fight for LGBTQ+ marriage equality, which would allow spouses to inherit each other's property under state law.
Even though it might be uncomfortable, right now is the ideal time to draft a will. Even a simple will that spells out your wishes, names who will handle the distribution of your assets, and names who will take care of your minor children can be very important in case of an unexpected tragedy.
You should also think about having a living will, as it is an excellent tool to safeguard your wishes regarding your health and end-of-life care should you be in a place where you can no longer express them yourself.
When you are ready to create a last will and testament, consider consulting a trusts & estates attorney who can help you explore estate planning options to find the best way to preserve your wishes. You can find a number of attorneys through AAL with ample experience in trusts & estates who can advise you on the best way to preserve your legacy by creating the will that best suits your needs.
*Disclaimer: Attorney At Law does not represent all lawyers in all states. There may be differences of opinion. It's always advisable to consult with an attorney when in a legal situation.