Strategists say one should begin with the end in mind. If you do not decide how you want your property to be handled when you pass on, the state will decide for you. This may not turn out the way you thought, especially for blended families. Deciding for yourself and leaving clear plans are a kindness to your family.
If you have young children, having a will allows you to express your wishes regarding who will care for them. You may also want to create a trust to protect the money going to your children (or grandchildren) if they are still too young to handle money. By putting this in your will, you decide who will be the trustee, carrying out your wishes for how to handle the money you leave your children or grandchildren. Leaving money directly to someone under 18 years old will cause problems and require court action but planning ahead will prevent that complexity. If you want to learn more about these protections, please contact us for more information.
If you or your spouse have ever served in the military, there may be aspects of military law that apply.
The Federal Estate and Gift Tax changed several times in the last few years with the most recent changes taking effect in January 2013. As of 2015, the new law puts the exclusion amount at $5,140,000 per person, and married couples have a combined limit of $10,280,000, so very few families are likely to be impacted under the new law compared to earlier exemption limits that have been as low as $60,000. (This time, these limits are indexed to inflation, so they will keep going up as our economy grows.) Your estate includes things that do not pass through your will, like life insurance proceeds, 401(K) and IRA accounts, and other assets that pass through a contractual agreement with the insurance company, brokerage company, bank or other type of company holding the account.
What is an Estate?
When someone dies, that person has left behind an estate, which is the legal term for everything that person owned. Even those who had very little have an estate. An estate can be as little as a person's clothes and other personal effects or can also include substantial assets, like real estate, investments, cars, boats and so on.
What Happens to the Estate?
Some estates are very small and "handling the estate" may not require any legal action. If that person owned any property with a written title, like a house or a car, it is likely that passing that title will require action by the probate court. If that person had a will, the will gets probated in the probate court. If there's no will, the probate court is still the place to go for handling the estate.
If you need to probate a will or handle an estate for someone who died without a will, you are required to have a lawyer help you. The probate courts will not allow an executor (the person chosen in a will to carry out the wishes of the one who died) or administrator (a person who is handling an estate for someone who died without a will) to handle the estate case without a lawyer. While a person can always represent himself, an executor cannot appear without a lawyer because the executor is not representing himself. Instead, the executor represents the estate of the person who died.
How Having a Will is Cheaper and Easier
A common provision people include in their will is to give their executor (the person chosen in a will to carry out the wishes of the one who died) the powers of independent administration - which means that the executor can carry out the instructions in the will without needing the court to give an okay to every action. If there is no will or the person named as executor does not fulfill that role, the court will appoint an administrator for the estate. Without the power of independent administration, this is handled as a dependent administration, which requires the executor or administrator to get the court's okay for every little thing. This is another way that having a will helps those you leave behind, because getting the court's permission for every action is expensive and time consuming.
Another common provision people include in their will is to say that they do not require their executor to post a bond. Without this language, the probate court will usually require the executor to post a bond that is equal to what the estate is worth, which can be an expensive thing to do - and sometimes the person you wanted to handle things for you cannot do it.
While it takes a little time and costs a little money to get a will, it will save time and money for your loved ones.
Because of the generality of this website, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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