Having a will is not just for wealthy folks, who need to pass large amounts of money across generations. It is a legal document that protects you while you are living, protects minor children if you die and also distributes property after you pass. Less than half of all adults in America have an estate plan, according to a 2017 survey by Caring.com, and what’s worse, only 36% with children under the age of 18 have a will.
Inside Indiana Business’ recent article, “With a Will, It's Done Your Way,” explained that if you die without a will (i.e., intestate), the law of the state where you reside determines how your property will be distributed. For example, in Indiana, here’s what happens:
- If you’re married, your spouse gets half of your assets and your children/grandchildren get the other half.
- If you’re married without children, your spouse gets three-quarters of your assets, and your parents will receive one-quarter.
- If you’re single, 100% of your assets go to your children.
- If you’re single without children, your parents get one-quarter of your property and your siblings, nieces, and nephews will receive the rest.
The court will also appoint some individual to take care of your children. That’s known as a guardian, and it’s usually a family member. While that may sound OK, a judge’s criteria may not be the same as yours. It’s better if you decide which family member or perhaps skip your family altogether and choose a friend to serve as guardian. Without a will, you give up your right to choose.
Talk to an experienced estate attorney who can prepare your will to be certain that your wishes are clearly articulated and minimize the potential for others to contest the terms.
An executor (also known as a personal representative) is the individual you name to carry out the wishes detailed in your will. He or she also is responsible for settling all your affairs. Consider carefully the person you select for this responsibility. You should also name a successor executor, in case your first choice is unable to act. An executor's job includes the following:
- Determining your assets;
- Contacting those you've named to receive property and distributing it to them;
- Notifying the credit agencies of your death;
- Canceling your credit cards;
- Opening a bank account for your estate;
- Ensuring debt payments, utilities, taxes and other outstanding expenses are paid, while your estate is open;
- Paying debts;
- Closing social media accounts;
- Filing the will in the right probate court; and
- Filing a final tax return and possibly an estate tax return.
Certain assets are distributed outside of the will, including property that is owned with another person (joint with rights of survivorship), life insurance policies, annuities, retirement accounts and other accounts with a named beneficiary. Be aware that anything with a beneficiary designation passes outside of the will, meaning that directions in the will about these types of assets will not matter: the beneficiary designation overrides the will.
Reference: Inside Indiana Business (June 11, 2018) “With a Will, It's Done Your Way”