On the morning of April 21, 2016, the world reacted in shock to the news that genius and groundbreaking musician Prince had died. 52-year-old Prince had more than 30 albums and won 7 Grammy awards in a career that spanned 40 years. In the days that followed, fans mourned his passing all over the world. President Obama even made this statement concerning Prince, “Few artists have influenced the sound and trajectory of popular music more distinctly, or touched quite so many people with their talent.” Another piece of news concerning Prince’s death continues to surprise people even today. Keep reading to learn 8 reasons you need a will.
In the following weeks, another piece of news surfaced. Though this news was less shocking than Prince’s death it still surprised many people. Prince, whose estate was worth approximately $250 million, did not have a will. He had many close friends. He also had one full sister and five half-siblings. Finally, there were many different charities Prince might have wanted to leave part of his estate to as a gift. However, because there was no will, 6 years later Prince’s assets are still in limbo. As of now, there is still no clarity as to what may happen to Prince’s estate.
It was certainly unfortunate that Prince did not have a will, considering the size of his estate, but what about you? How important is it to have a will if you don’t have many assets? How important is it to have a will if you’re still young? The verdict is in: at any stage in life having a will is a necessity, and the consequences of not having one can be much worse than you may think. Below are 8 reasons you need a will.
1. You Decide How Your Estate is Distributed
The most important reason to have a will is you get to decide what happens to your possessions. If you do not have a properly executed will a judge decides where your money and property goes. Sometimes this process is fair, but often it is purely by the numbers. This causes the result to be far from what the deceased would have wanted. There are many stories I could use as an example, but here’s two. In one case an estranged brother, who was actually a suspect in the death of the deceased, received half of the estate. In another case a prized collection of crystal butterflies were sold instead of divided among the children because the children could not agree on who received one butterfly.
The worst is when you die leaving no surviving close family members. In this situation your assets will go to the state! Having a will gives you the power to decide how your estate will be distributed… and that is the true power of a will.
2. You Decide Who Will Take Care Of Your Minor Children
Another important reason to have a will is you get to decide who will be responsible for raising your minor children if you die young. Without a will the court will decide which family members to put the children with, which might not be who you would have picked. Putting in writing who you want to take care of your children, and how you want your children to be taken care of, can avoid a messy situation that would affect your whole family. In addition, who you designate as potential caretakers of your children can change over time…and you can make this change without needing to execute a whole new will.
In addition to deciding who will take care of your children, you can designate how they are taken care of. If you do not have a will, a court will use common trust guidelines to designate the children’s support. These guidelines are sometimes adequate, but sometimes the set of regulations might not apply correctly to your specific situation. For example, you might have a house you’d like to be rented and the money put in trust for your child. Furthermore, you might then have the house made available for the child to live in when they turn 18. Without a will, the house would almost certainly merely be sold and the money set aside for the child.
3. You Protect Your Children if Your Spouse Remarries
If you’re married and you pass without a will, the law generally is that your entire estate goes to your spouse to do with as they please. However, this can lead to a Cinderella situation if the spouse gets remarried to someone with kids, or ends up having children with a new person… leaving your children behind. If your spouse uses all the money you left them, or if they make a will leaving all their possessions to their new children, your children could be left with nothing.
A will allows you to specifically leave part of your estate to your children and can establish a trust for your children that will remain even if your spouse gets remarried. You could also leave part of your estate to your spouse for support and part of your estate to your children. Protecting your children is one of the biggest reasons you need a will.
4. You Decide Who Will Inherit and Who Will Not
Deciding who will inherit and who will not is another reason you need a will. Many families have harmonious relationships and people often have no problem with their estate being split evenly among all their heirs. However, sometimes situations arise where there is someone who would otherwise inherit who you do not want to receive your possessions. Whether this is an estranged family member or the result of bad blood, the only way to specifically exclude that person is to make a will stating such.
In contrast, many people have individuals in their life who have become like family over the years. Whether it’s a neighbor’s child who grew up in your house and you walked them down the aisle at their wedding or a long-term live in girlfriend who is for all intents and purposes a spouse, if your will goes to probate these people will likely get nothing from your estate. Making a will allows you to designate someone outside your next of kin to inherit alongside them, thus acknowledging that special relationship.
5. You Decide Who Manages Your Estate
The person who manages your estate is often known as an executor. The executor is in charge of paying bills, paying off debts, canceling credit cards, getting your death certificate to banks and other institutions that need to be notified, and doing many other things that are involved with the day-to-day operation of closing your estate. This process should be entrusted to someone you trust and who has the time and energy to do everything necessary. This is another decision which can change over time, which you can change without making an entire new will.
If you do not have a will, the court will appoint someone. If you have a large estate, like in the case of Prince, the court might appoint a bank or other specialized institution to be the executor of your estate. These institutions are often fair and trustworthy, but they’re also expensive, which can reduce the value of your estate. If your estate is not large enough to warrant an institution to be the executor, the judge could appoint a friend or family member.
However, even if the court appoints a trustworthy person who you would have approved of—which is not guaranteed—the court usually requires the person to pay an expensive bond to assure the person does not misuse your assets. This could cause a severe financial hardship on that close family member or friend, which you could have avoided if you had created a will. Being able to decide who will manage your estate is one of the main reasons you need a will.
6. Gifts and Charitable Donations
Many charitable and educational institutions around the world exists because someone left all or part of their estate as a legacy gift to the institution. If you do not have a will, no gifts or charitable contributions are given to anyone. Additionally, some people include sentimental gifts in their will, such as giving a specific photo album to a favorite niece. Other wills include a charitable donation such as leaving an automobile to a local church to be used to bring people to their services.
Others just want to have something humorous in their will. A fantastic example of this is Bilbo Baggins. Bilbo, from Lord of the Rings, leaves his spoons to the Sackville Baggins, since “They were all making out with one or two when they came over anyway.” Why could Bilbo do this? Because he had a will.
7. Tax Advantages
Estate taxes in some states can greatly reduce the inheritance you leave to your heirs. Any gifts left reduces the value of the taxable estate and therefore reduces the taxes your heirs might have to pay. Therefore, you need a will to reduce the amount the government gets from your estate.
8. Changes Over Time
Another reason to have a will is you can change your will as your life situations change. When you have a properly executed will, you do not have to redo the entire will to make changes. A will codicil is a legal document that changes or supplements a will. This can be useful if there are minor changes you wish to make. One example is if a child of yours gets married and you want to update their name. Another example would be if you want to change who the executor is. In both of these examples, a codicil is a great way to make those changes.
Additionally, you could create a personal property memorandum. If you include a personal property memorandum with your original will, you’ll be able change it as you acquire or sell property. A personal property memorandum is a separate document attached to your will listing specific gifts or items you want to give to specific people. For example, you want to leave your Prius to your son for him to drive, when you sell that vehicle and buy a Tesla, you can update the personal property memorandum with the stroke of a pen and make that change.
Of course, you can also create a new will at any point. Every good will has a provision that revokes all prior wills.
The Need of a Properly Executed Will
I’ve addressed the importance of having a will, but what is the best way to go about getting one? A simple internet search reveals multiple websites and companies which offer wills at low cost prices. They promise you the freedom to create your will the way you want in a hassle-free way. It seems like a dream come true …but is it is as good as it seems? The answer, of course, is that it depends. But, likely no.
When you create a will online without the guidance of an attorney you face a variety of possible issues. First, each state has different, sometimes completely opposite, requirements for a will. These differences mainly concern the language used and how to make the will valid. I have personally seen wills offered online, supposedly made for two different states. I knew these states had different rules concerning the format of a will; however, these two wills were exact copies of each other. This is just the beginning of the problems you can have with online wills. Even if the website formats your will correctly and uses the correct language, there is still one major issue. These websites do not walk you through the process of finalizing the will like an attorney would.
The very moment you need your will to work is the very moment it’s too late to change it. Therefore, it’s best to consult with an attorney when drafting and executing your will to ensure it’s valid.
A Case Example
How you execute your will is extremely important as to whether the court will consider the will valid or not. Most states have very specific requirements as to the people who witnesses you signing the will. There is a case where a man, with a skin disease, signed his will behind a curtain, in the presence of his doctor, while vocalizing what he was doing. The court deemed the will invalid because the witnesses did not actually “witness” the will being signed!
Different states have different requirements of the witnesses. Some states mandate that a will be notarized as well as witnessed. Some states require 3 witnesses while other states only required 2. What they all have in common is this: if their exact requirements are not met, the will is considered invalid. Having the wishes for your estate ignored because you failed to have enough witness would be an unfortunate way for events to unfold.
Michael Jackson’s Estate
Just as I began this article with a celebrity who did not have a will, I’ll end with a celebrity who had a will, but did not execute the will properly.
On June 25, 2009 many fans grieved when Michael Jackson passed away. On July 1, 2009 his attorney filed his will at the Los Angeles County Courthouse. Michael Jackson even had a trust set up to help with the administration of his Estate. However, soon afterwards some of Jackson’s family filed a law suit alleging the will was not valid. The issues with the will has caused problems with Jackson’s estate ever since and there’s still no resolution.
A properly executed will is the absolute best way to make sure your possessions are distributed as you see fit. Additionally, a properly executed will ensures your children are cared for by the right people. Finally, a properly executed will helps make the probate process as stress free as possible. In a Sense, a properly executed will is the last gift from you to those you care for most.
How Healthy Is Your Estate Plan?
A healthy estate plan consists of 3 documents: a will, a healthcare directive, and a durable power of attorney. All 3 are important…all 3 are needed. Simply put, you need a properly executed healthcare directive and durable power of attorney…and you need a will. Having a will is a necessity. The consequences of not having a will can be much worse than you may think.
Schedule a free consultation with Chris Baldwin and have your estate plan drafted and properly executed within a week.
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