Frequently Asked Will Questions
Frequently Asked Will and Estate Questions
Q. What happens if I die without a will?
A. If you fail to plan your estate and die without a will, the law will create an estate plan for you. The results may not reflect what you would have chosen. That law is set up to determine who will get a share of your estate and how much each person's share will be. Those shares are set in stone. It doesn't matter who helped you when you needed it and who wouldn't return your phone calls. In addition, if you have children under 18 at the time of your death a costly and complicated guardianship will need to be set up.
The problems of dying without a will are aggravated if a married couple owns a family business with fifty percent owned by each. If one of the spouses dies without a will, the surviving spouse will have the guardianship for the minor children as a “partner” in the family business. The guardian may then have to post a bond and make a detailed periodic accounting to a court for all business transactions.
If you die without a will and are survived by your spouse alone, leaving no children, not all of your estate will pass to your surviving spouse; part of your estate will pass to your parents. Again, that may not be what you want in the long run. It may even make it hard for your spouse to get by after your death.
If you die and are survived by your children only, leaving no surviving spouse, your entire estate will pass to your children. If they are minors, a conservatorship will be necessary to manage their property.
Q. Who will raise my minor children after my death?
A. If you die leaving minor children, the other parent ordinarily will raise and support them. If the other parent is not living, however, your minor children will require a “guardian.” A guardian is an individual who is appointed to care for your children. A guardian often has limited control over the children's finances. If you don't appoint a guardian in your will the court will make the selection of a guardian. This can take a long time. Time during which your children are in limbo. We strongly recommend that you make the choice yourself, rather than leaving it to a judge unfamiliar with your family situation.
When choosing a guardian try to think of people you not only trust, obviously, but who will raise your kids with values and priorities similar to your own. Remember that your children's guardian will be making significant decisions as your children grow up and you want to know that they are a person who will try to do what you would have done in their place.
If both parents die, your minor children may be left with substantial property interests that need management and protection. You can ensure that these are handled smoothly and properly by setting up trusts for the children. When thinking about your will you have an opportunity to decide exactly how you would want your children's money handled. Should they get a lump sum when they turn 18, 21, 25, graduate from college, get married? You can also set out the types of expenses that can be paid straight from the trust? For instance, you can say that the money can be used to buy a car but set a limit on how much can be spent so that your child doesn't get his first Maserati at 16.
If you have planned your estate properly, the guardian should not experience financial strain in raising your children. We usually suggest that upon the death of you and your spouse, a trust be established for your minor children. The trustee should be encouraged to make distributions to assist the guardian.
Q. What is a personal representative?
A. Your personal representative is the person who will serve as the primary representative of your estate. You may be more familiar with the terms “executor” or “administrator” for such an individual.
Q. What is “administration” of my estate?
A. Administration of an estate involves the collection of assets, payment of debts and expenses, and distribution of inheritances to the beneficiaries or heirs. The Court oversees the administration of an estate but usually only as needed to ensure that your estate is being handled properly.
Some of the factors that we use to help you determine which procedures or devices to use are: (1) the total value of your estate; (2) the applicable statute of limitations; (3) how much conflict you think there may or even will be between your beneficiaries; (4) your specific wishes; (5) how complex the estate is; (6) the amount of potential liability in the Estate; and (7) how your assets are titled.
We tend to recommend broad powers of administration to our clients. The more restrictions a client places on his or her administrator, the more costly and difficult the end task will be. That can cut significantly into the total amount to be shared between the beneficiaries.
Q. How frequently should I review my estate plan?
A. As a general rule, we suggest that you contact us every four or five years for a conference to review your estate plan and to update the information in your permanent file. We also recommend that you contact us in the event of a dramatic change in your finances or in your family situation. For example, a substantial increase in your estate (through increased life insurance, inheritance, gifts, or successful investments) may create opportunities for tax savings, as well as necessitate further family financial planning. A divorce, of course, will re-open completely the matter of planning your estate.
Q. What property will not pass under my will?
A. Proceeds from life insurance policies and retirement benefits will pass by the plan terms. In addition, property held jointly will often pass to the surviving account holder and not under your will. Therefore, you should review your beneficiary designations and account agreements to be sure they are coordinated with your will.
