Do I need a Last Will and Testament? The short answer to this question is probably. Here are some reasons why clients choose to have an attorney prepare a Last Will and Testament for them.
First, clients with young children usually wish to name a Guardian of their children in their Last Will and Testament. A Guardian is important because this is the person who will take care of the minor children if both of the parents are unable to do so due to incapacity or death. If clients do not name a Guardian in their Last Will and Testament, then a probate court will have to decide on its own who will take care of the children. Without any formal insight into the parents' wishes, the court might appoint a Guardian that the parents otherwise would not have chosen. By executing a Last Will and Testament, the clients make their wishes clear to the judge who will make a critical decision for the clients’ minor children.
Second, clients need a Last Will and Testament in order to name a Personal Representative. A Personal Representative is the one appointed by the court to handle a person's affairs in settling the estate. Sometimes clients are very particular about which child they wish to serve as Personal Representative. Perhaps one child is more capable of handling finances in the eyes of the parents. Perhaps clients are afraid that placing the responsibility of Personal Representative upon a particular son or daughter would burden that individual too heavily. In these situations, parents often want to make it clear who will be take care of settling the estate. Like nominating a Guardian, nominating a Personal Representative is critical to settling an individual’s estate in a proper, fair and efficient manner.
Third, it may be important to have a Last Will and Testament so that the client can create a testamentary trust. After consultation with the attorney, the client may choose to create a testamentary trust within a Last Will and Testament. A testamentary trust can be very helpful in protecting assets when a sick spouse survives the healthy spouse. For instance, if the wife is in the nursing home receiving Medicaid benefits, it may be necessary to protect sick spouse’s Medicaid eligibility by establishing a testamentary trust. To make a long story short, when the husband passes away first, the husband's assets can be funneled through a testamentary trust to benefit the wife such that the wife does not become Medicaid ineligible. The alternative is that the wife might lose Medicaid eligibility if the husband’s assets are transferred directly to the wife. If this is a concern of yours, please ask the attorney about your situation.
Fourth, an individual needs a Last Will and Testament if he or she wishes to alter the default estate plan that the government has already provided. That's right. The government has already provided the default estate plan for you through intestate succession. For instance, Indiana Code § 29-1-2-1(b) requires that the surviving spouse only received 1/2 of the net estate if the decedent is survived by at least one (1) child. If there is no surviving child, then the surviving spouse takes 3/4 of the net estate and the individual’s living parents take the rest. Obviously, this is probably not what a married couple desires. Instead, a married couple probably desires that the surviving spouse receive all of the net estate, and if there is no surviving spouse, then the couple likely wishes that the child(ren) receive everything. But since this is not the default estate plan that the government has provided, an individual needs a Last Will and Testament to change that default plan.
These are just a few reasons why clients need a Last Will and Testament.