Why Have a Will?
The question as to whether one needs a will has multiple answers. However, to get the correct answer, you first need to know what happens if you don’t have a will at death.
- Without a will, one can incur costly legal fees and other court costs.
- Without a will, the state has a vested interest in what happens to the remaining assets.
- Without a will, your heirs may be delayed in receiving any assets you leave.
- Without a will, state law may decide who receives your property, and who has guardianship of your minor children.
If you die without a will,
the state laws of intestacy (which means dying without a will) determine who receives your property after you die. This could void your wishes as to what your heirs may receive, and probably, more importantly, determine what can be provided to the spouse.
There are state laws that provide for the surviving spouse to receive only one-third of the estate. This may not be enough to allow him or her to adequately live after you are deceased.
If you do not have a will at death,
the legal costs can be enormous. Many states allow attorneys to charge fees based on a percentage of up to 10% of the value of the remaining estate. For example, if you leave an estate valued at $100,000 without a will, the attorney could charge you up to $10,000.
Also, the executor that is appointed may be given the authority to do many things without a court order and be paid for doing something unnecessary, which can be costly.
If you have a large estate,
a will can save you in estate taxes. Too many people do not consider estate taxes.
Dying without a will could reduce the amount of money that could otherwise be designated for the beneficiaries.
If you have minor children,
without the direction of your will, the state may determine who the guardian becomes and who controls the assets for their benefit.
There are many options
that can be put into the will that will direct your assets and insure that your wishes are fulfilled. A trust can be established if necessary.
Means of managing the remaining assets can be addressed. You get to select who is in charge of handling the estate and its assets in the future.
You can leave funds to your favorite charity, such as Tupelo Children’s Mansion, and by doing so you have left a living legacy.
A will is not an expensive document.
Most attorneys are reasonable and very helpful. Preparing a will is something that you need to strongly consider.
Questions Often Asked
“My estate is very small, so I don’t need a will?”
Answer: Wrong! Anyone who owns property or is concerned about who receives the assets of the estate should have a will. If there are minor children, a person should always have a will to direct the welfare of that child.
“My wife and I just got married,” or, “We haven’t been married long and only have one child, so is there a need to spend money on a will?”
Answer: Yes, there is. The cost of a will is far less than the cost of legal fees in the future. You want to insure that your spouse is protected and can receive a maximum amount of your estate, and you want to insure that minor kids are taken care of properly and determine who will take care of them.
“At the suggestion of my bank, I have put all my funds into an account with the designation of joint tenancy with right of survivorship (JTWROS). Because of this, why do I need a will?”
Answer: Having JTWROS has both pros and cons. The assets listed in this way will pass on to the surviving spouse without the necessity of probate, but what happens when there is no surviving spouse? Then the funds will not pass on to children, grandchildren, or other beneficiaries without incurring additional legal costs and time delays.
For further information or assistance, please contact:
Aubrey L. Jayroe
TCM Vice President & CFO,
Accredited Tax Advisor
Enrolled Agent with the IRS
Tupelo Children’s Mansion
P.O. Box 167
Tupelo, MS 38802