When musician Prince passed away earlier this year, it was discovered he hadn’t created a will. Despite the fact that Prince had millions in assets, including a sprawling home and recording studio, money in the bank and reportedly dozens of albums’ worth of unreleased material, he hadn’t taken the legal steps to specify what would happen to his estate in case of unforeseen events.
Having No Will Means Difficulties
In such cases, the state that a person dies in has responsibility for apportioning their assets to their legal heirs, if they have any. Only the state has a say in who gets what, how much, when and under what conditions in these cases.
Most states have legal formulas that determine these terms, and they favor spouses and family members over anyone else (this means unmarried partners, their children and/or other persons or businesses can be left in limbo).
There is no deviation from the legal formulas allowed, no matter who a person is or the circumstances of their death. If they lack a will, this is called dying “intestate,” and the probate court (a special court that resolves the distribution of deceased people’s estates) is charged with disposing of their assets.
For someone like Prince, who had an enormous estate, just determining the value and extent of what he owned could take years, and that’s before figuring out which of his heirs have any claims to his property.
Although you may not be as well off as Prince was, if you have any assets at all or care about how they’re distributed (and especially don’t want portions of them going to the state), you should have a will drafted that spells out how you would like your estate to be disbursed.
Even if you have no significant assets, it’s still a good idea to draw up a will. Why? Let’s say you died in a train crash, and the transit company was found at fault for the incident. Your estate could stand to benefit in the thousands or even millions of dollars.
Without a binding legal document specifying beneficiaries (those who will receive your assets), the state must go through the process of finding all eligible heirs and distributing any settlements, which an executor of your estate would need to collect first. This takes time and costs money, all of which would be deducted from the value of your estate.
Why a Will Helps
When a person has no will, a probate court has to document their assets. This step in itself can be intensive, depending on how much someone owned. Property such as real estate may be solely in the name of the deceased person and must eventually have its title transferred. A jointly-owned property must have its title readjusted.
Retirement accounts, savings accounts and life insurance policies should all have beneficiaries specified. Internet passwords for all of the associated websites for these should be written down in a document that’s separate from the will.
If a person has a business or has income-generating assets such as patents, copyrights or other intellectual property, a will can determine who will be the beneficiaries of these in the years to come.
Even beyond assets, there are other important reasons to have a will. If you have children, a will can specify who will care for them and how that care will be paid for. This is especially important if you want such persons to be people other than your blood relatives. The care for personal pets should also not be left undefined.
Without a will or without a well-defined one, battles can arise among heirs (likely family members), even if a court ultimately decides who gets what. By clearly specifying in your will who’s entitled to what property (including naming follow-up beneficiaries in case a primary heir isn’t alive, can’t be found or is unwilling to accept an asset), you can save your estate legal expenses which it would otherwise be responsible for.
How To Make a Will
A lawyer can help you draw up a will for surprisingly little money as long as it isn’t complicated. Some basic wills start at under $100. There are even websites online that will help you prepare such a document that can be free or almost free to use.
Be sure that any documents they create are legal in your state before you proceed if you choose this route. Once your will is drafted, in most states, you need to sign it in the presence of two witnesses (who are recommended not to be beneficiaries or your will’s executor).
The witnesses also need to sign the will as well. Once everyone signs, some states require the will to be notarized. You should scan the final document and retain it in a safe place with a backup.
Many people update their wills at the same time they do their taxes every year. It’s not a bad idea if you’re going to have all of your documents out at the same time anyway. In any event, it’s generally a good idea to have a look at your will when you marry, have children or divorce.
Your will can specify how to pay for any necessary executor of it (the person or law firm which will be endowed with the power of attorney to enact its terms). It can also detail final funeral and/or memorial arrangements for yourself and how those are to be paid for as well.
For some people, a secondary document called a living will is also important. This details who will care for you in case you’re injured to the point where you’re alive but can’t make intelligent decisions. For many people, having these details in writing gives them great peace of mind.
After you’ve created a will, be sure to tell your family members that it exists and where it’s located, even if you have squabbles with them. This will prevent unplanned difficulties and stress if something were to happen to you.
Drawing up a will is not a difficult process. It will help your loved ones to deal with one of life’s hardest blows and will relieve pressure during an emotional time. Planning ahead doesn’t take much and can help resolve possible future conflicts. It’s not just a sound decision for your relatives; it will allow you to rest easy knowing your wishes will be carried out even after you’re gone.
Regards,
Ethan Warrick
Editor
Wealth Authority
