Wills Not Just for the Rich
Statistics show up to 70% of Americans do not have a will. A will is a document that lets you tell the world whom you want to get your assets and how you want them handled. Die without one, and the court decides the distribution your assets according to a set formula set forth by statute, without regard to your wishes, or your heirs' needs.
A will can legally protect your spouse, children, and assets as it spells out exactly what you would like to happen to your assets upon your passing. What are other benefits of having a will?
- Most people assume if a spouse dies everything goes to the survivor of them. That is certainly true of jointly owned property (laws vary from state to state), but in Kentucky and Ohio, the surviving spouse is entitled to only about one-half the individually owned assets of their deceased spouse. The remainder of their assets pass to their children. Your spouse could be very surprised to find, after your death, that half of your property has passed to your children.
- If your children are minors, insult can be added to injury. The court must appoint a guardian for the property passing to the children. Such guardianship, while necessary, is costly due to fees and court costs to establish this.
- With a Will, you choose the guardian who will raise your children. Upon the death of only one parent, the surviving parent obviously continues as the natural guardian, so the problem only arises if both parents die in a common accident, or if one parent has already died. Absent such a will, the court will take it upon itself to choose family members or a state appointed guardian for your child.
- Also, if you have minor children you also have the right to appoint a trustee for their estate whose responsibility it is to invest and takes care of the property that a minor child inherits. It is usually better to appoint a trustee and put specific directions in the will for applying the child's inheritance for support and education, and specific directions for the age at which the child may receive the balance of the inheritance outright, free of trust.
- If you're single, with no children, assets are distributed to your parents, brothers, sisters, grandparents, and even aunts, uncles, or cousins, depending on who survives you.
- The absence of a will can sometimes lead to family disputes and hurt feelings. If a will is in place, it will minimize fights that may arise after your passing.
- Without a will, your family potentially faces a larger inheritance tax bill and there is no guarantee your intended wishes will be carried out. A will allows you to minimize the amount of taxes your estate has to pay. Accordingly, the value of the assets and property left to family and/or charity is increased.
- A will is also useful if you have a trust. A trust is a legal mechanism that lets you put conditions on how your assets are distributed after you die and it often lets you minimize gift and estate taxes. However, you will still need a will since most trusts deal only with specific assets such as life insurance, but typically not the total of your assets.
- This will allow you to make gifts. Some gifts assist in avoiding the estate paying higher taxes.
- A will allows you to make donations to charity, thereby leaving a legacy and reflecting your personal values or interest in such a charity
- Unmarried partners may not receive anything from your estate unless a will is made in their favor.
- You get to choose who serves as the executor and handles your estate, thereby ensuring that this individual is trustworthy, organized and honest. The executor makes sure all of your affairs are in order by following the directions of the will, including transfer or sale of personal property, real estate, and vehicles; paying off any debts and funeral expenses; notifying banks and closing accounts; and making final distributions to heirs.
- You may change your will at any time and changes should be considered as life circumstances change (e.g. marriage, divorce, births, adoptions, etc.).
To meet with an estate planning attorney at O'Hara, Ruberg, Taylor, Sloan and Sergent, contact Michael K. Ruberg today.