Are you ready to create a will? Prince’s and more recently Aretha Franklin’s death revealed that although they were megastars they shared a common trait with the majority of Americans: they died intestate, which means without a Will.[1] For the record, the size and complexity of Prince’s and Aretha’s assets would require more sophisticated planning than a Will, but they died without even that bare minimum. We who help the surviving family who are trying to administer the assets left by the decedent scratch our heads that people do not plan for this eventuality. If you’re on the fence about creating your own Will, then consider the following reasons we hear and why they are ill-conceived.
I Don’t Have Enough Assets or an “Estate” to Justify a Will
If you own a house and/or have a checking account, a savings account, a retirement account, insurance, or vehicles, then you have an estate. You have assets with value to transfer, and you don’t need $500,000 in assets for a Will to be helpful. If your family is going to have to transfer your assets anyway why not help them by creating a Will to facilitate the process and memorialize your wishes.
It Costs Too Much to Create a Will
The objection to the cost of a Will is a corollary of the first idea; I don’t have enough assets to justify a Will. However, administrative costs increase without a Will, and the more modest the estate the greater impact on what beneficiaries receive. For example, the person who is appointed to administer your estate will generally have to pay a surety bond.
A surety bond is essentially an insurance policy required by the court to reimburse the estate if an administrator takes or mismanages the assets. The policy premium is based on the applicant’s credit history and the value of the assets, but it will likely be at least $500 and may be as high as several thousand dollars. A surety bond is required each year the estate is open (it must remain open for at least one year, but two years of administration is common). If you have a Will, then the surety requirement can be waived and you will have at least broken even but more likely come out ahead in terms of administrative costs versus the cost of a Will.
There are more war stories than time to share, but here are few other examples of where intestacy can turn things sideways and increase administrative costs. Without a Will to nominate a person you trust to serve as executor, generally speaking, any one of your heirs can serve as administrator (the official title for the person who administers an intestate estate). There may be disagreement among the heirs about who should serve as administrator. In this case, the Clerk will not appoint any one of them, and a petition will need to be filed with the Court, a hearing scheduled, etc., to have a judge determine who will serve.
Without a Will to establish the decedent’s family members it is easier for someone to assert that the decedent is their father and sue the estate to be included as an heir, in which case the administrator will need to use estate assets to defend against the lawsuit. No assets can be transferred until the suit is resolved because the outcome affects who inherits. Thus, there is both the expense of the suit and the additional time of administration which means more years to pay the surety bond.
I Don’t Need to Create a Will Because I Trust My Family to Carry Out My Wishes
There are several reasons why this seemingly reasonable option frequently turns out to be a poor choice.
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It is generally reckless to make assumptions about what people know (or remember!) with something as important as the handling of your final affairs.
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The person you trust and who knows what to do may not be living or may not have the capacity to carry out your wishes at the time of your death.
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A Will helps the person you trust have a written document to point to when they carry out your wishes, especially if any of the beneficiaries are pushy or opinionated. In addition, the Will can include language to discourage lawsuits against the estate to invalidate the Will or “undo” your wishes.
Sometimes when clients tell us “I trust them” it means they are going to leave their assets pay on death to one or two people, generally adult children, who they think will “do right” by other family members. On more than one occasion we have seen family members effectively disinherited because the person trusted to “do right” has decided they do not wish to share the funds (and legally, they do not have to). In other instances, the client leaves everything as-is and just believes everyone will agree and know what to do. At this point, I must refer you back to the administrative costs section; especially, if there is a disagreement about who will serve.
Moreover, when you die without a Will, your estate will go to your heirs (generally speaking “spouse and kin”). Heirs are defined by statute, and so if you want someone to receive assets in addition to an heir, you’re relying on the faithfulness of the heir to share some of what they receive. Again, we have seen heirs know what the decedent wanted and chose not to share their inheritance to make it happen. Even if the heir wants to share as you intended, other circumstances in the heir’s life—divorce, disability, a lawsuit, bankruptcy, etc. —may make it difficult or impossible to carry out your wishes.
It is also important to point out that in Virginia a surviving spouse is not the sole heir of an intestate estate when a decedent has children from a prior relationship. In other words, regardless of the length of the marriage and regardless of the promises made by the decedent’s children to make sure the spouse is “taken care of” these children in the blended family have no legal obligation to do so. The result in these instances is that a spouse of many decades may receive only 1/3 of the assets and the remaining 2/3 will be distributed to the decedent’s children (and any children from the marriage).
This should go without saying, but at someone’s death there is already considerable heartache for the surviving family and friends. Do not add headaches and heartburn by failing to have a Will.
Contact Us to Create a Will
If you want to create a Will or review your existing Will, then contact the attorneys of Promise Law at (757) 690-2470 or click here to get started.
[1] Jeffrey M. Jones, Majority in U.S. Do Not Have a Will, Gallup, May 18, 2016, https://news.gallup.com/poll/191651/majority-not.aspx
