You Only Think You Don't Have A Will
Clients, friends, and family members often tell us, "we don't have a Will, we should probably get on that." Enter the theme of procrastination. According to an August 2013 ABC News poll, 72% of Americans say that they have planned for retirement and death, but the statistics tell a different story. Specifically, only 50% of Americans have a Will, and even fewer (42%) have a health care proxy and power of attorney. These numbers vary greatly by age. Among post-baby boomers – people who are age 37 and younger – only 28% have had their Will drafted.
Procrastination in estate planning can be the result of thinking that a Will is too expensive, or that there are too few assets to protect, or simply the uncomfortable nature of speaking about death. If young and middle-aged adults , especially those with children, really understood the implications of being ill-prepared, they would quickly make estate planning a high priority.
While some of your assets might go directly to a spouse or family member because they are jointly owned, or a beneficiary has been designated, you might have assets that are in your name alone. What happens to them? Or what if you and your spouse were simultaneously lost in an accident, and you have children? In these situations, there are very real problems with not having a Will.
First, you might not like the "default" Will that New York has already written for you – referred to as the laws of "intestacy":
- When you die in New York without a Will and are married with children, your spouse receives $50,000 plus one-half of the residue of your estate, and your children receive the other one half of your residue.
- If there are no children, then all of your estate passes to your spouse.
- If there are children and no spouse, then your entire estate will pass to your children.
- If you have no spouse or children, then the whole of your estate will pass to your parents in equal shares – or out to grandparents and cousins if parents have predeceased.
Second, what happens to the kids under 18 if you did not have a Will which includes a guardianship clause designating someone to care for the person and property of your children. Family chaos and legal expense can ensue because a legal guardian has to be appointed. A guardianship proceeding will cost thousands of dollars in legal fees, with costs escalating if there is any dispute among the extended family members about who is supposed to be the guardian.
Third, do you really want your child to get all of his or her inheritance at age 18? That is what happens unless you set up a trust in the Will to better specify when and for what your child will receive the funds. Unless you have a Will that sets up a trust, the State requires that a Uniform Transfers to Minors Act account be set up, with the guardian holding the assets only until the child reaches 18.
Fourth, if your assets include real estate investments like vacation homes or timeshares, or businesses that you would like to leave to specific family members generations, it is imperative that you have a Will that designates who is to receive these assets. The laws of intestacy which apply if you do not have a Will do not specify how businesses or real property should be divided and distributed, and are concerned only that the designated parties receive their specified percentage shares.
Fifth, the laws of intestacy make no provision for charitable giving. If you intend to have a church, synagogue or community charity receive a distribution from your estate, you must say so in your Will.
It would be far better to spent time now having a Will prepared, so that your estate plan reflects your values, concerns and intended beneficiaries. We would be happy to assist you with that process. Call Dan Williford or Mike McConville to set up an appointment to consult about this priority.
This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.