If you don’t have a will, you’re far from alone. In fact, a 2017 Caring.com study reveals that 60% of Americans don’t have wills for a variety of reasons, including not wanting to think about such a difficult topic, lack of time, no kids, and having a small estate. There are even celebrities who fall into this category, including Prince and Aretha Franklin who recently passed without leaving a will.
However, just because you’re in the majority doesn’t mean you’re making the right choice - especially when you consider the unpredictability of life and the potential consequences of dying without this important legal document in place. Here’s a closer look at why everyone needs a will.
Photo Credit: 'Prince!' by Scott Penner licensed under CC-BY-SA 2.0
What Is a Will?
In order to understand why you need a will, it’s first essential to understand what one is and how it works. Also referred to as a “last will and testament,” a will’s purpose is simple: to state your last wishes. After your death, the court uses the will to make sure your estate is distributed according to your specifications.
In addition to addressing assets such as money, bank accounts, personal property and heirlooms, wills also include provisions for “real property,” i.e. homes and buildings.
Last but certainly not least, wills designate guardians for minor children.
The Monumental Costs of Not Leaving a Will
Many people assume that there’s not a lot at stake if they don’t have a large estate. This couldn’t be further from the truth. The reality is that failure to proactively address what should happen to any of your personal assets or property after your death can have serious repercussions - financial and otherwise.
Without a will, probate - the court-supervised process through which a person’s estate is distributed - can be much more complicated. During that time, your heirs may disagree over who gets what, which can prolong the process, as well as create tension within families. Due to their own conflicting interests, they may also dispute what should be done with your assets and real property.
For example, while one of your heirs may view a $20,000 diamond ring that’s been in the family for a century for its cash value, an heir with fewer financial needs might see the same ring as an invaluable heirloom. Even when this question is addressed, more considerations may arise depending on whether it’s kept or sold. The takeaway? The more specific you are in setting terms regarding the sale and/or preservation of your assets and real property, the less contentious probate becomes.
In some cases, this squabbling goes on so long and the cost of arbitration becomes so high that family tensions begin to create rifts while the estate is bled dry. Court fees, attorney’s fees, accounting fees, appraisal and business valuation fees, and other miscellaneous fees compound when probate drags on for months. Having a will is an opportunity to provide critical clarity that prevents this from happening.
Not only that, but there’s no guarantee that your assets, real property or children will end up in the right hands without a will. The laws pertaining to dying in intestacy - or without a will - vary depending on where you live. In some states, surviving spouses inherit everything, while in others the estate is split between the surviving spouse and other parties, such as the deceased’s parents or siblings.
If you have young children, meanwhile, the stakes can be even higher. Do you really want to leave decisions regarding their care in the hands of state laws? The benefits of having a will also apply if you become ill or injured to the point of incapacitation. What will happen to you and your children in that situation?
Not leaving a will can also have a number of other effects, including your pets not getting the care they deserve or you not getting the type of funeral you want.
Create a Will to Ensure Peace of Mind
While no one likes to think about dying, it happens to everyone. Creating a will spares your family members additional heartache and headache. And as we’ve all heard the expression, “Nothing is certain in life but death,” doing so sooner than later is the best way to ensure optimal outcomes for your loved ones in the event of your passing. The good news? Wealth management professionals, like the experts at Caldwell Trust, are waiting to walk you through the process and help you and your family secure peace of mind.
