People come in a lot of times and ask me, “Do I need a Will because I don’t have a lot of assets?”
The answer is, regardless of your assets, everyone needs a Will. A Will is more for the ones you love, so when you die, it directs the distribution of your assets. Typically, a married couple with no children, when one of the two people dies, the assets will transfer to the surviving spouse. However, what happens if both you and your spouse die and you have children? In that case, if you die intestate (without a Will), the State then chooses who will look after your children. Thus, you will have no say in the matter. You may have told somebody or planned that a specific person would become the guardians of your children. Without a Will, however, the State has the final say. Also, if you have children, you can provide for them efficiently and appropriately by establishing a trust for them. You can also avoid unnecessary expenses on the administration of the estate by properly drafting and executing a Will.
There are many tax saving opportunities available to you. By not having a Will, you may lose thousands of dollars in needless taxes. If you die without a Will, your heirs, depending on who they are, they will benefit equally by class, which might not necessarily be how you would have intended to distribute your assets among your heirs. For example, your only heirs are two brothers, one of whom you have not talked to in 25 years, and you had no intention of having him inherit any part of your estate upon your death. If you die without a Will, he could potentially be entitled half of your estate. Additionally, with a Will, you can leave specific items to specific people. Perhaps you want to leave everything to your spouse except for a painting you want to leave to your parents or a sibling, a Will gives you the opportunity to do so.
Another important aspect of drafting a Will is that you can choose your personal representative or executor of the Will, who is the person who will oversee the distribution of your assets. Without a Will, the administrator may be subject to constant court supervision; therefore, the cost of administrating the estate may be much greater.
What happens if a couple has children and a spouse dies? In some states, if the spouse dies intestate, the assets will actually be divided up between the children and the surviving spouse and will not necessarily all go to the surviving spouse. There are many examples where this could be very difficult for the surviving spouse if the children receive an equal share of the deceased spouse’s estate. In this case, it could be difficult for the surviving spouse to carry on the lifestyle and provide for the children upon the other spouse’s death. Whereas, if a properly constructed Will were in place, all the assets can be given to the surviving spouse allowing the spouse to care for the children while maintaining the same standard of living, or a trust could be established for the children, whereby the surviving spouse was named as the trustee and have control over the assets in trust for the benefit of the children.
In some states, even if the couple has no children, the spouse may not receive all the assets of the surviving spouse. In some cases, the deceased spouse’s parents, siblings, and distant relatives may be entitled to a share of the estate.
The above examples are for people who are married. It becomes even more crucial for a couple who are not married to leave a Will. Intestacy laws generally do not provide for unmarried couples. For example, a couple may have been living together for 40 years and essentially be married in all aspects, except legally. When one of the partners dies, the surviving partner could be entitled to absolutely nothing, especially in states like New Mexico where common law marriages are not recognized.
There are many scenarios that people think are not important and, therefore, do not have a Will, but in such cases, the death of that person can affect the ones they love insofar as the distribution of the deceased person’s estate. In some states, for example, a biological parent who had given up the deceased for adoption can actually be regarded as an heir and be entitled to a share of the assets.
In conclusion, in order to provide for the ones you love upon your death in the manner you wish, a Will is an absolute necessity. Otherwise, the State will step in and decide how your assets will be distributed. You can save your surviving loved ones a lot of time, money, and hardship by properly constructing an estate plan. In addition, it is important to update your Will any time your financial or family circumstances change. Whenever you move from state to state, it is also a good idea to have an attorney licensed in that state to review your Will and/or Trust and verify that it conforms to state laws. By not properly updating your Will, you could potentially leave a loved one out whom you never intended to exclude.
Please contact Albuquerque Business Law for more info about wills and trusts.