Planning how to divide your assets among heirs after your death can be an uncomfortable topic. Many people get their first experience with the complex legal topics of estate planning, will construction, and division of assets after the death of a loved one. This emotionally charged time does not allow for the most solid grasp of how wills and inheritance law function to be developed.
This guide seeks to lay out how wills function, the role they play, and how they relate to inheritance laws.
A last will and testament is a legal document that you write in order to expresses your intentions for your assets, dependents, and other aspects of your estate after your death. This document makes up the very basis of your estate plan, the way your affairs will be handled after you die.
Wills are the most vital component of planning your estate because they give the probate court, the authority that handles 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.
People who die with a valid will provide a legally binding blueprint for how they want their affairs to be settled. As much as possible, the probate court will defer to what is expressed in the will as a matter of respect and convenience. Anyone who dies without a will is declared “intestate.”
Intestacy is the legal state of dying without a last will and testament. In the event that you die without a will, the court will instead have to default to state law. While a will may have specific provisions for how the individual would like their inheritors to receive property, the priority of the probate court is with settling debts or other financial obligations that you may have left behind.
Once the probate court has settled all financial matters, including the price of the court-appointed administrator who is settling your estate on your behalf, assets will divide according to state law.
Depending on how you make your will, it may not be accepted by the court. Most modern wills are required to be typed, witnessed by a certain number of unrelated witnesses, and sometimes notarized. Other types of wills can exist, but their legal status becomes questionable.
For example, if you make a handwritten will, legally called a holographic will, it may not be recognized as valid by the courts. Sometimes, if the will was created before the legislation that banned them, it may be accepted. Even if a handwritten will is accepted in your state, you will still need to ensure that all necessary witnesses are present and it is notarized if that is a requirement of your state’s will law.
If you wanted to pursue a more convenient or modern avenue you might consider an online will. Some online companies will allow you to use a will creation template to create your will on the internet. This can be a more convenient method of creating a will, but you should consider keeping a physical version if possible as these online wills have all the same vulnerabilities as a normal computer file.
Intestacy law differs from state to state, but it is common in one factor: it only deals with assets that are not already spoken for. Some assets that you own will not be able to be transferred by a will. These assets would have skipped the probate process if you had a will and therefore they skip the probate process without a will as well.
Some assets such as life insurance policies, living trusts, IRAs, 401(k)s, and retirement accounts can have a “contingency beneficiary.” A contingency beneficiary will automatically receive ownership of an asset or account in the event that the original beneficiary, in this case you, passes away.
Additionally, if you hold any joint assets like property, bank accounts, businesses, or stocks, these assets will also be excluded from probate. Instead, your share of will just be absorbed by the other surviving joint owners. In the event that you were the last surviving joint owner, the asset would pass normally into your estate.
The final category of things that the state can’t touch are payable-on-death assets. If you set up a bank account, stock portfolio, or deed transfer that triggers upon your death, these actions will go through without probate approval. In all other cases, the state probate law will decide the fate of your assets.
Your last will and testament can do more than just decide where to put your stuff when you die. A last will and testament or lack thereof can also seriouslt impact the future of your minor children.
Usually, if you’re married, full custody will transfer to your spouse upon your death. However, there are some contingencies that a will can help supplement. In the event that you and your spouse die simultaneously, you and your spouse are divorced, or your spouse has already passed, a will can assign guardianship. This is a useful just-in-case that ensures your children pass to a guardian who has received some notification about this contingency in advance and is trusted to raise and care for your children.
In addition to assigning guardianship for your children, a will can also protect you and your wishes in the event that you are incapacitated. A living will allows you to assign an individual to act as your power of attorney, an agent bound to enforce your wishes should you become unable to enforce them yourself. Living wills can also stipulate when not to resuscitate or whether to move you to a retirement home.
If you don’t have a will and you are unmarried, you need to change one of those things. State law has a strict hierarchy for the division of property to heirs for intestate individuals. In that hierarchy, spouses and children get first pick, then more distant family. If no next of kin can be found, the state will absorb all the assets of the deceased.
If you die without a will, your friends, any organizations, and your unmarried spouse are entitled to nothing. 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 together. This was one of the key motivations for the fight for LGBTQ+ marriage equality that would allow spouses to inherit each other’s property under state law.
Though it may be uncomfortable, the best time to write a will is today. Having even a simple will that expresses your wishes, assigns custody of any minor children, and appoints someone to handle the division of your assets, can be invaluable in case you were to experience an unexpected, fatal accident.
Additionally, having a living will can ensure that not only is the division of your assets secured, but also that your care needs are expressed in the event of your incapacitation. A will is the best tool to protect your wishes when you can no longer advocate for yourself.
State law covering intestacy is not designed to be callous, but it is designed to be efficient. In unusual or fringe cases, this causes harm to people you may have cared about. If you want to make sure friends, unmarried partners, or other non-family groups can claim the assets you want to leave them, you will need a will. If you want your medical decisions to be respected even if you can’t express them yourself, you will need a will.
When you are ready to create a last will and testament, you should also consider consulting a trusts & estates attorney. A trusts & estates attorney can help you explore estate planning options to find the best way to preserve your wishes. AAL has a number of experienced trusts & estates attorneys 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.