If you own any personal property, whether it’s a home or a bank account, it’s important that you have a will. The rock star Prince is an example of what can happen when you don’t. Fourteen months after the artist’s death, his heirs have yet to receive a penny from a multi-million dollar estate that stands to be cut in half by court costs and taxes. While none of us have assets comparable to what Prince left behind, the consequences of not having a will are the same.
To ensure that your wishes for transferring property and assets are followed, and to avoid long and costly legal proceedings, lawyers and financial advisors recommend people have a will. Unfortunately, most people don’t.
A Costly Oversight
Review All of Your Assets
Do you have a pension, a 401k or a life insurance policy?
Are the beneficiaries listed on those policies who you would choose today?
For example, if you listed a spouse to whom you are now divorced, unless you’ve made a written change, that person is still entitled to those assets, even if you are remarried. If you listed your first child but never added your second, that child will not receive anything.
When there is no will, probate – the legal process for distributing the money and personal property that belonged to the person who died – can take years and cost as much as 10 percent of these assets. But with planning, probate can often be reduced. For example, money can sometimes be placed in trusts, which are exempt from probate, making disbursement of funds faster. This is important when cash is needed for a mortgage, tuition or your funeral expenses. According to the National Funeral Directors Association, the median cost of a funeral is upwards of $8,000.
Another reason for having a will is that while life isn’t black and white, without written guidance, that’s how the court will likely see it. For example, if you are legally separated or going through a divorce at the time of your death, the court may still consider you to be married. If so, your spouse will be entitled to a portion or possibly all of what you own. If you have no spouse and are a parent with children under age 18, the court will appoint a guardian you might not want and also dictate how the money you left behind will be managed. Children who are at least 18 will receive their entire inheritance regardless of whether they are mature enough to handle it. Instead of putting what you left behind toward a career or home that can prepare them to be financially secure when they are adults, they might decide to travel or just not work until the money runs out.
If you haven’t stipulated it in writing, the court will also decide what happens to your jewelry, furniture and other personal property, including whether it must be sold. Heirloom items are not exempt. Neither are pets.
Having a will is the best way to protect what you have and ensure it goes where and to whom you want. If your circumstances are straightforward, a variety of online websites make it possible to draw up a will without having to consult a lawyer. However, if your assets are substantial, if you have children, a blended family or charitable causes that you supported in life, you should consider involving an attorney who specializes in estate planning. Many LIUNA local unions and benefit funds have legal services programs that members can access for drafting a will. Check with your local union hall.
Don’t Keep It a Secret
Once your will is drawn, keep it somewhere accessible like in a closet in your home and tell someone you trust where it can be found. A safety deposit box is not a good idea as keys can be misplaced and a bank may not be open when needed.
You should review your will and all personal documents every few years to be sure your needs and the needs of those you care about are still being addressed. Nobody likes to think about the fact that one day they will die and life will go on without them. But having a will can give peace of mind that you’ve done everything you can to ensure that those you leave behind will be protected.
[Janet Lubman Rathner]
