While none of us like to contemplate our mortality, it is vital to plan for what happens to your assets when you pass away. Not only does a will allow you to distribute your assets according to your wishes, it can legally protect your family and save your family time and money.
Here are the top ten reasons to have a will:
- You dictate how your assets will be distributed. Your will is revocable as long as you are alive. Once you die it become irrevocable and your heirs must follow your wishes. If you die without a will in New York, New York State law, not you, will dictate how your assets will be distributed. If you do not have a plan, New York State has a plan for you.
- You may set up trusts for your children and/or your spouse to protect your assets. Many times you have heirs that, if they were to inherit a large sum of money or even a small sum of money, they would not spend it wisely. By establishing a trust under your will for these individuals, you are preventing those heirs from spending money unwisely and protecting the assets from an unexpected event or creditor.
- You may name a guardian for your minor children. Under your will, if you have minor children, you may name a guardian for them. Without a will, the court will decide the guardian for your minor children, which may or may not be as you would have chosen.
- You decide who will handle the distribution of your estate. In your will, you name an Executor to manage your estate, pay any bills and debts and follow your will distributing the assets accordingly. If you die without a will, the court will appoint an administrator which, again, may or may not be who you would have chosen to administer your estate.
- Minimize estate litigation. With a will, you are telling your family members how your assets are to be distributed. A properly drafted and executed will cannot be successfully challenged, whereas if you die without a will, your heirs may end up litigating how your assets are to be distributed.
- You may disinherit heirs. If you die without a will, New York State law dictates how your assets will be distributed. If you have a will, and you have heirs that you wish to disinherit, subject to requirements to give certain assets to the spouse, you may disinherit any other heirs that would inherit without a will.
- You may always change your will during your lifetime. A will is revocable until you pass away, unlike an irrevocable trust that may not be changed once you have established it. That is why it is important to have a will and it is also important to review the will on a regular basis to determine if your wishes are still properly expressed under the will.
- Estate tax planning. There are numerous ways through trusts and other mechanisms to minimize estate taxes through a properly drafted will. Without proper estate planning, there is no estate tax planning and no minimization of estate taxes.
- Even if you have a revocable trust, you still need a will. A lot of people wish to avoid probate and often this is done through the establishment of a revocable trust. However, unless the revocable trust is fully funded and all the assets are transferred to the revocable trust, a will is still needed to administer the assets that were not transferred to the trust. Common assets that are often not transferred to the trust would be a car and other personal property. Without the will, these assets would pass out to heirs as directed by the New York State law of intestacy.
- You can use a will to protect your assets in the event of a catastrophic illness of one or more of your heirs. You can set up a trust in your will, for example, for the benefit of your spouse, but if your spouse requires long term care services, the funds in a properly drafted trust would not have to be used to pay for the catastrophic cost of long term care.
Proper estate planning is one of the most important things to do to protect yourself and your family.