Some Not So Obvious Reasons to Have a Will

Modified/excerpt from Some Not So Obvious Reasons to Have a Will, Kristy Bayus, Pessin Katz Law, P.A., 12/10/16

Many times I have heard the following questions from prospective clients: “If my things will pass to my spouse and children automatically, why do I need a Will?” or “My estate is not large enough to be subject to estate taxes, is a Will  even necessary?”

There are a few instances where, in fact, your assets will pass to your family, in just the way you intend, even without a Will. These instances include (i) jointly owned property (e.g. a house titled as a married couple or a joint bank account); (ii) assets with a beneficiary designation (e.g. a life insurance policy or a retirement account); and (iii) perhaps, even intestacy (dying without a Will when state law controls).  These instances aside, there are still numerous other reasons to have a Will.

1. Simultaneous Death. The most obvious answer to “why do I still need a Will” is the simultaneous death of you and your loved one. If you and your spouse, or child, or other joint account owner die simultaneously, it may be unclear through whose estate the assets will pass. For example, if all assets are titled jointly by spouses who have children from previous marriages, but no children together, and it is deemed that one spouse survives the other in a car crash, if only for a few minutes, then the children of the other spouse could end up with no inheritance.
2. Trusts for Children. Another reason that it is prudent to have a Will is so that you can provide adequately for your specific family situation. You may have your children named as a beneficiary on your life insurance, which is quite common.  However, if you die while a child is a minor, then depending on the account, your child would receive the entire proceeds at age 18 or 21.  Leaving a child with a large sum of inheritance in retirement accounts and insurance proceeds at age 18 can be very unwise, especially because at that time, you do not know their propensity for spending, their overall maturity, or the likelihood that they will have a lasting marriage, as they are financially unexperienced.  Additionally, if one of your children (or any other beneficiary – e.g. a parent or sibling) has “special needs”, whether that be a mental disability, a drug or alcohol addiction, or a physical handicap, the lump-sum distribution at any age could disqualify that child for public assistance benefits to which the child would otherwise qualify.
3. Designate Personal Representatives. A Will can be used to designate the Personal Representatives (sometimes called “executors”) of your estate. The Personal Representatives handle the administration of your estate, such as the payment of taxes and administration expenses, the disposition of your remains, and the distribution of your assets to the intended beneficiaries. If you do not designate a Personal Representative under your Will, then any person (with a few exceptions, such as minors) may serve as your Personal Representative if they so apply to the court for the job.  There is, however, a statutory order of priority if more than one person applies to serve as your Personal Representative the court will follow unless there is clear evidence that the person is unsuitable to serve.
4. Disposal of Remains. Your Will can also specify your wishes with regard to the disposal of your remains (e.g. burial, cremation, or other instructions) as well as instructions regarding a funeral service.  Also, your Will gives your Personal Representative the authority to pay your funeral expenses and the expenses of your burial or cremation from your estate, which they may otherwise have to pay out of pocket, to be repaid by the estate many months later.
5. Designate Guardians. A Will is also used to name guardians of your minor children in the event of the death of both you and your child’s other parent, perhaps the most important decision for the health and safety of your child in the event of your death.  Designating a guardian for a minor child should be a priority, especially if your child’s other parent is not living, incompetent, or legally unfit to be a guardian. This can avoid a period of uncertainty for the minor child as well as the court costs and attorney expenses of a hearing to determine who should handle the role.
6. Pour Over Wills. Finally, even if you have a trust agreement in place, you still need a Will (called a “pour over will”) for the above reasons, as trusts do not designate your Personal Representatives or guardians for children, and trusts do not provide for your wishes for the disposal of your remains.

The above list is not exhaustive and every family and every person brings a new set of challenges that could result from intestacy. If you do not have a Will, if your Will is out of date, or if your Will does not reflect your intentions, it is important to schedule a review of your estate plan with your attorney.