Preparing a Last Will and Testament is the best way to effectively demonstrate one’s intentions with respect to distribution of personal property when he/she dies. While thinking about what will happen after one passes away is an uncomfortable thought for most people, it is quite important to consider how one’s property will be disposed of after death.
The benefits of stating one’s intentions cannot be overstated. One of the important things a will does is to name an “executor”. The executor is responsible for carrying out the wishes of the testator, the person who died and left a will. Upon presentation of the will to probate court, and the court’s certification that the will is valid, the court will issue formal papers to the executor giving him/her authority to act on behalf of the testator. The probate court empowers the executor to transfer the deceased’s property, close personal accounts, pay creditors, and perform any other tasks necessary to carry out the final business of the deceased person. A testator may name multiple individuals to be co-executors, if he prefers. This way, if the executor is unable or unwilling to carry out the responsibilities, another person is able to step in.
In addition, to avoid estate taxes, it is important to consider how one’s property is held. Jointly owned property will not be subject to inclusion in one’s estate. For example, if an individual has a personal savings account balance, and owns that account solely in his name, the monies in that account will be subject to estate taxes. However, if the individual would like to avoid estate taxes, he can add a trusted family member to the account, and that family member would have a legal interest in the account. Upon death, the account would become the family member’s property outright, and not subject to estate taxes. The same would hold for personal property, such as real estate. Likewise, life insurance benefits are not subject to probate or estate taxes, as life insurance policies name a beneficiary, who receives the proceeds from the policy upon receipt of a death certificate.
While even the least complex estates can take one to two years to process, it is much better to have a will stating one’s wishes before death. Otherwise, the state intestacy law dictates who receives the property, and the process will take much longer. An individual without a will dies “intestate” and his property must pass in accordance with the intestacy laws of the state where he/she was a permanent resident. The order of a typical intestacy distribution is to: a) surviving spouse; b) children; c) parents; d) siblings; e) grandparents; f) next of kin; and g) state. Thus, if a legally married man, though estranged from his wife, dies intestate, and has no children or parents, his property will likely pass to his estranged wife – which may not be what the man wanted. In addition, when no will exists, and no executor is appointed, the probate court will appoint an “administrator”, as personal representative to carry on the business of the deceased, much like an executor would. However, the administrator may be asked to post a bond with the court to protect the beneficiaries of an estate in the event the administrator fails to act in the best interests of the estate or makes financial errors. This may impose a financial and personal hardship on a family member who is already suffering the loss of someone they loved.
Although thinking of one own’s demise may seem morbid, it is important to consider one’s wishes for distribution of property, as the lack of planning can have serious personal and financial consequences for loved ones left behind. Preparing a last will and testament is a way of showing responsibility, stating your intentions, and having consideration for family and friends who are left to handle your personal belongings once you are gone. If you are looking for an attorney to help with your will, or want to speak to a different kind of attorney, my page on lawyers will help.