Why Do You Need a Will?

Clients often ask why a will is a necessary component of their estate plan. The answer is that if you die without a will, the laws of the State where you reside determine where your assets go. If you are married, approximately one-half goes to your spouse and the other half to your children. If you have no spouse, children or grandchildren your assets go to parents, if they are alive, then brothers and sisters. Most states have a statutory scheme of inheritance, and the inheritance goes to blood relatives. Also, if you die without a will, someone needs to petition the court to appoint an administrator. That is usually a family member. By having a will prepared you can determine who inherits and who does not, and you can choose who you want handling your affairs. In essence, writing a will gives you control.

It is true that if you have beneficiaries listed on your assets, those assets will pass directly to the beneficiaries at death and avoid probate. That is usually a good idea, even though probate in some states, such as New York and New Jersey, have an easy probate system. Having others be joint owners on assets is a terrible idea, as you are essentially gifting the property during your lifetime and giving the joint owner control. If you need to do anything with a joint account, you need to get the permission of a joint owner. Unfortunately, some assets, such as cooperative apartments, condos and houses can not have beneficiaries named. Those are assets which must pass under your will, or if you do not have a will, pursuant to the laws of intestacy. Therefore, even if you have beneficiaries listed on all your bank accounts, life insurance, investment accounts, etc., you will likely need a will in order to have the real property or coop apartment pass to the people who you want to receive it.

Having a revocable trust is also a good way to pass assets, and probate can be avoided. However, oftentimes clients fail to transfer all of their assets into the trust, so it is a good idea to have a will in addition to the trust. Even if one has beneficiaries on their assets, it is not a bad idea to prepare a will, to take care of the situation where the beneficiary passes away before you do and you fail to name a new beneficiary. In a will, you can also include a provision for trusts for minor beneficiaries. Children under the age of eighteen can not legally inherit, so that naming a child as a beneficiary is a bad idea. With a will, a trust can easily be created for that minor, and you alone can determine under what circumstances and at what ages that minor can receive the asset outright.

Having a will prepared is usually not very complicated, and so it is a good idea to include it in your estate plan.