5 Reasons Everyone Needs a Will
1. Avoid Intestate Succession
Many people assume that simply verbally expressing to a friend or relative your wishes about how you would like to dispose of your estate will do the trick for estate planning. However, this is not always the case. Indiana law says that if you die without a valid will in place, you are considered to have died intestate. Intestate succession is a form of estate distribution that is dictated by a series of statutes. Those statutes determine the percentage of your estate particular individuals will receive, based on their relation to you, the testator. In other words, you will have no control over who receives your assets, and how much they receive.
Intestate succession can become extremely important in situations where you have children or relatives you specifically wish to disinherit, as well as situations where you or your spouse have had multiple marriages. You cannot preferentially fund care for a disabled child over healthy children through intestate succession. If you are in a long-term relationship but are not married, your assets may not pass to that individual at all. Having a valid will in place can easily address and avoid these situations.
2. Name Guardians for Minor Children
If you have minor children, you should take advantage of the opportunity to name guardians in the event of your and the other parent’s untimely death. Naming guardians in a will is simple. If you do not have a will, then the court will decide who will become the guardian of your minor children—which takes the decision completely out of your hands. In contrast, named guardians in a will are rarely ignored by a court in probate. Although in the absence of a will, friends and relatives can petition the court to become the guardian of your minor children, the process takes months and the appointment is not guaranteed. It is much easier to have a will and name the guardians yourself.
3. Establish Testamentary Trusts for Spouses and Minor Children
If you are married and have minor children, you should consider establishing testamentary trusts in your will. Testamentary trusts are only used in the event of a certain set of circumstances, such as the death of both parents. These trusts can be used to protect spouses and children from inability, disability, predators, and creditors. Another benefit of these trusts is that you can control when assets are distributed to minor children.
For example, assume you and your spouse have life insurance policies totaling $500,000. If you were both to die in a plane crash together, then your minor children would likely have access to that money without any restriction. If you have a 16-year-old, chances are that money will be gone in a few months. Testamentary trusts allow you to set up the guidelines for distributing that money in a responsible way, such as establishing incentives for good grades and graduating college, as well as specific distributions for a wedding or down payment on a home.
4. Beneficiary Designations
Certain assets, such as retirement accounts and life insurance, are considered non-probate assets and are distributed pursuant to Indiana contract law. Other assets, such as jointly-held real property and some bank accounts, are also considered non-probate assets and are distributed to beneficiaries outside of the probate process. Without proper planning and implementation of your estate plan, these assets may not pass to the individuals you want them to. Most estate plans will address these issues and ensure that your assets are passed on in accordance with your wishes.
5. Leave Your Family with Peace of Mind
You do not create a will for your benefit—you do it for your family’s benefit. Sorting out a loved one’s estate can be extremely burdensome for friends and family. That burden, coupled with the loss of that loved one, can often times be overwhelming. It is better to help your family sort out your estate with clear, well-documented guidance. Create a simple will and make these decisions now. It is a lot easier and less expensive than you think.
Note: Every individual’s estate is unique. More complex estates may benefit from the use of a living trust, pour-over will or other estate planning tools such as advance directives. You should consult with a knowledgeable estate planning attorney to see what estate planning tools would be most beneficial to you.