Many folks that walk into my office for the first time don’t have a will in place. Maybe I should rephrase that….the folks that walk into my office without a will that they have constructed themselves have a will as prepared by their state. Dying intestate (without a will) will move the state’s plan into action, which more than likely will not coincide with your own plans or wishes.
Let’s look at a few examples of what a state’s will may include (or not include):
Since most of my clients have minor children, let’s start with guardianship provisions. The state will try to get the children where they belong, and if the relatives cannot agree, the state can appoint someone. Guess what? That someone can be a stranger! Guardianship provisions should be the primary focus of young couples with children. It’s important that you designate a guardian and not leave that up to the state. Don’t let the care of your children become a bureaucratic decision.
Estate Tax Reduction
Your state will more than likely forgo any opportunity to lower estate taxes. There are estate planning techniques that may reduce estate taxes, but the state may not implement any options unless stated in a legal document (will). In essence, the state will say that your money is better off going into the state or federal coffers and not to your spouse, children, or charity.
Division of your assets
Here in Tennessee, the state may give your spouse only one-third of your assets and your children the remaining two-thirds. The state can appoint your spouse as the legal guardian of your minor children but may require a performance bond to guarantee the proper handling of the children’s assets. The living spouse may also have to produce a yearly account to the probate court of the monies spent on the children. These details will only compound a difficult situation (death) by making a simple task (spending money on your children) complicated and burdensome.
These are a few of the issues that can arise out of intestate death. The over-riding theme here is that while the state will try to do what is right with your children and assets, the letter of the state’s law may not be your wishes. If you have a will, make sure it conveys your wishes. If you do not have a will, speak with an attorney and have one drafted.