"Do I need a will?" Estate planning is a topic that touches the lives of all adults, regardless of age or financial status. In this article, we will demystify the importance of wills, exploring why they are a cornerstone of a well-rounded estate plan and how they play a crucial role in securing your legacy and protecting your loved ones.
What is a Will?
A will, also known as a last will and testament, is a legally binding document that outlines an individual's wishes regarding the distribution of their assets, property, and possessions after their passing. It serves as a roadmap for how their estate should be managed and allocated among heirs, beneficiaries, and loved ones. In addition to asset distribution, a will can also designate guardians for minor children, specify funeral and burial preferences, and name an executor to oversee the execution of the will's provisions. Having a will is a fundamental element of estate planning, allowing individuals to ensure their legacy is preserved as they envision and providing peace of mind to their loved ones.
What Can Happen?
Yahoo’s recent article entitled, “What Happens If I Die Without a Valid Will?” says that it is not uncommon for a will to contemplate more assets than the estate actually had at the time of death. Assets can range from money and investments to real property, personal property, intellectual property, land use rights and more. A will can divide up this property, leave it to multiple heirs, order the sale, distribute the proceeds and generally take any other legal action they want.
For instance, someone might give away $250,000 in their will, but die with only $100,000 in assets. When this happens, the estate is divided up on a pro-rata basis according to the terms of the will. Therefore, someone who’d been given $125,000 in the will would receive $50,000 of the actual estate. Since their share of the will came to 50% of the estate, they receive 50% of what actually was left.
In the reverse, it’s also not uncommon for a will to contemplate fewer assets than the estate had at the time of death. This is known as “partial intestacy” and is relatively rare, since most wills include a clause along the lines of “any remainder to” or “the rest to” or some other catch-all clause. This cures partial intestacy because it establishes who inherits any assets not specifically distributed. In cases of partial intestacy, the courts will distribute any remaining assets according to state law.
There are many exceptions to estate law, and the two most common exceptions to testate inheritance are:
- Marital estates – If you die while married, some or all of your assets will constitute marital assets, so they belong to you and your spouse jointly. Other assets may automatically transfer to your spouse and become marital assets after your death. Marital assets don’t transfer until after the death of both spouses.
- Evasion – If you transferred assets before your death to avoid paying your debts, those transfers can be unwound, and the assets returned to the estate—a fairly common form of tax or creditor fraud.
Vick Law, P.C. Can Help
Regardless of your age or financial situation, a will can be a powerful tool in ensuring that your wishes are honored and your loved ones are provided for after you're gone. At Vick Law, P.C., we are experienced in helping individuals and families navigate the complexities of estate planning, including the creation of wills that reflect your unique circumstances and goals. If you're contemplating the need for a will or have questions about your existing estate plan, don't hesitate to reach out to us today. Your future deserves the right plan, and we're here to help you build it.
Reference: Yahoo (Jan. 27, 2023) “What Happens If I Die Without a Valid Will?”
