According to recent surveys, more than 60% of adults in the United States do not have wills. Contrary to popular belief, you don’t have to own a big house to have an estate and you don’t have to have young children to have a will.
Your estate consists of everything you own when you die, including your home, personal property, investments, bank accounts, retirement plans and any interests in a family business or partnership. If you do not have a will, state law will determine how most of your belongings are distributed, and you may not like the result. If you do not have a will, the court will decide who will be the guardian of your minor children. If you don’t want to run the risk of the government making your decisions for you, then you need a will.
A will can protect your spouse. In most states, the surviving spouse is only entitled to about one-half of the individually owned assets of a deceased spouse, while the rest of the assets pass to your children. If your children are minors, the court will appoint a guardian for property passing to them, and in some states your surviving spouse cannot be appointed as guardian.
A will can appoint executor(s), who are responsible for paying off bills, cancelling your credit cards, and making sure your affairs are in order, to administer your estate. A will can help to avoid a lengthy probate process. Contrary to popular belief, all estates must go through the probate process, with or without a will. Having a will, however, speeds up the probate process and informs the court how you’d like your estate divided.
A will can also save taxes. It is possible for married couples whose combined estates are more than the federal estate tax exemption amount ($5.49 million in 2017) to save federal and state estate tax through special trust provisions in a will or revocable trust.
A will allows you to leave part of your assets to charity. If you want to benefit both family members and charity, there are ways in which you can reduce the taxes for your family through special charitable trust arrangements.
A will allows you to disinherit individuals, who would otherwise inherit under state intestacy laws.
A will allows you to decide how your estate will be distributed. A will is flexible; it can change with you as the circumstances of your life change.
Many people put off estate planning until they have more time or until they are more accepting of their mortality. However, it is my experience that 50% of the people that died today did not expect to. In such cases, failure to plan before your death becomes a permanent problem for your loved ones and your family is left to put together the pieces. Proper planning, including drafting a will and powers of attorney, will avoid this unfortunate situation. Remember, tomorrow is not promised.
Please call us today at (212) 867-0707 to discuss your estate planning needs.
Have a great weekend.