Why You Need a Will
A will is not only for people who want to set up trusts or protect their estate from taxes. Those may indeed be important benefits from some people, however the primary reason for making a will is to leave your property to those you care about in the manner and proportions you choose.
If you die without a will
If you die without a will, the assets in your name in most instances will be distributed by a court appointed administrator among your family members pursuant to a statutorily fixed priority. These rules, codified in Article 4 of the Estates and Trust Law, reflect what the New York State Legislature decided would likely be preferable in most situations. For example, if you were to pass away without a will in place, your assets would be dissolved in the following manner based upon your family structure:
- A spouse and descendants: your spouse takes the first $50,000 and one-half the balance of the property, and your descendants share the rest.
- A spouse but no descendants: spouse takes all.
- Descendants, no spouse: descendants take all.
- A parent or parents, no spouse, no descendants: your parent or parents take all.
- Descendants of either parent but none of the closer relatives: the descendants of your parents take all.
- One or more grandparents or their descendants, but none of the closer relatives: half goes to the maternal side and half to the paternal (but not including second cousins if you have first cousins on either side).
- Where “descendants” include a mix of generations, living children take a full equal share, and children of a predeceased child then divide equally the share of their deceased parent.
This allocation may very well differ from the distribution you desire. A properly drafted will can enable you to direct the distribution of your assets in accordance with your wishes.
If you die without a will and leave young children
Here’s something else to consider: If any of your children are under 18 years of age at your death, a court appointed guardian will be required to manage your minor child’s share of your assets. Although the court probably would appoint your spouse a guardian of the property for your minor children, this is not guaranteed.
Also, the guardian may have to post a bond. Payment of the bond premiums will cost money. Moreover, if any portion of your assets is needed to pay for your child’s education, clothing or living costs, prior approval of the court is necessary. The court also requires guardians to file annual accountings of income and expenses.
In addition, the range of investments available for the funds held by the guardian may be limited. Thus if the guardianship lasts for any length of time, the child’s funds may not grow at an acceptable pace. These problems can be avoided with a properly drafted will.
If you and your spouse die at or about the same time, it is important that you have made provisions not only for a guardian of the property of any child under age 18, but also that you name a guardian of the person for each minor child. A guardian of the person is given custody of the child during minority. While the designation in your will is subject to the review and confirmation by the court, the court will usually give deference to your wishes. Thus, with a properly drafted will you can provide guidance to the court on who you desire to be the guardian of your minor children.
A will determines who will oversee the administration and distribution of your estate assets
A will allows you to name a legal representative, or executor, of your estate to administer and distribute your property upon your death. An Executor can be a relative, a friend, your lawyer or a bank or trust company that specializes in the handling of estates.
The choice of an Executor is yours only if you make a will. You realize the value of having qualified people help with your affairs during life. Such people are just as valuable after you die.
What is the best way to make a will?
While there are many options available for drafting your own will, from downloadable forms to do it yourself instruction manuals, a will drafted in this fashion may not be the best will for your personal situation. You might miss an essential element of a comprehensive estate plan or any number of opportunities to maximize the efficient distribution of your assets to your chosen beneficiaries.
Moreover, you may not end up with a valid will, as wills have formalities of execution that are fixed by state law. An invalid will can result in the court administering your estate as if a will had not been written, or distributing by intestacy. Securing the professional guidance of an attorney can resolve these issues.
Making the best plan and the best will takes knowledge and expert advice
Making the best plan and the best will takes knowledge and expert advice. For example, did you know that property held jointly with another may not be distributed by will? Or that life insurance, individual retirement accounts, pension plans and other assets may or may not be distributed by will depending on who is named as a beneficiary?
Or that a spouse has a right to a car or certain other items, as well as to a large share of your property no matter what your will may direct?
The best estate plan recognizes that your will is only part of your total plan for the distribution of your property. Contact Donnellan & Knussman, PLLC to make an appointment to discuss preparing your will as well as your overall estate planning wishes.
If you plan properly and have your plan reviewed periodically, you may lower or eliminate the tax burden on your estate and leave more to your beneficiaries
You should have an understanding of how estate and income taxes affect you and your assets prior to drafting your will. The federal and New York tax laws change often as a result of various tax reform acts. You may not be up to date with these complex and frequently changing laws. You may also be unaware that you can choose which of your beneficiaries pay the estate taxes. If you do not choose how your estate taxes will be allocated, the tax burden will be allocated among your beneficiaries according to statutory rules that may or may not be in accordance with your wishes. An attorney can help you draft a will and create an estate plan that addresses these issues. If you plan properly and have your plan periodically reviewed by an attorney, you may be able to reduce or eliminate the tax burden on your estate and leave more to your beneficiaries.