This is a question that I hear quite a bit. This answer can also vary from person to person. It is true that regardless of the size of your estate, the law provides a method to give your property to your heirs. Most commonly this is done through a Will.
Having a Will allows you control over what happens after you pass away. There is a lot more to your life than just your worldly possessions. Even those of modest means often leave behind a spouse, sometimes children, and sentimental possessions whose value can never be put down to dollars and cents. The main benefit of a Will, even for the average American, is that you can control this process. If you die without a Will, these decisions will be made for you by a process called Intestate Succession.
This aspect of Minnesota law essentially transfers your possessions to your next of kin. Who is your next of kin? It will undoubtedly be one of your relatives, but it will not necessarily be the one you choose. The law attempts to
name your heirs as your spouse first followed by those closest to you in blood relations.
Let’s take the example of Bill and Janet. They are married and have three children from their marriage and no other children. They are a modest family and beyond their house, household goods, and some retirement savings in Bill’s 401K do not have many assets to pass on should they die. Let’s take a look at what might happen should Bill and Janet both have an unfortunately early death without a Will.
In this scenario, certain things such as life insurance, Bill’s 401K, and their bank accounts pass to their designated beneficiaries. This would be true even if Bill and Janet had Wills. What happens to the house? What happens to the children if they are under age 18?
The closest blood relation to Bill and Janet under the rule of Intestate Succession are their three children. The children would receive the house and all of the household and sentimental belongings. This is to say that each child owns one undivided third of each thing left behind. That is not that complicated concerning the family home. It isn’t that out of the ordinary for real estate to be owned by more than one person.
This is also true for all of the sentimental items. Each child owns one third of the photo albums. They each own one third of grandma’s heirloom broach. They each own one third of Bill and Janet’s clothing, jewelry, silverware, and other household items. Maybe that doesn’t sound like such a bad situation, and for some families it might not be a difficult one. However, what if the children don’t get along? If they are left to decide whether or not to sell the items and split the money or even decide who gets what themselves then this can cause a lot of heartache and anger if they are not on speaking terms.
Bill and Janet could have solved this by leaving a Will. They could have determined which child would get each of these items. They could have themselves directed the sale of the items with the proceeds being split. If the children are under 18 then this becomes even more complicated.
If the children are under age 18 then there may need to be a custodian of the assets assigned by a court. The Uniform Gift to Minor’s Act will not allow the minors to control significant assets, like the house or insurance proceeds, themselves. Does your family know who you would like to serve in this role should the unmentionable happen? Have you spoken to them about it? If noone in the family is willing to do this then someone outside of the family will have to be named, and often paid, to serve in this role.
Where will the children live? Would both Bill and Janet’s families agree on whom should get the children? Are they all fit? Is there someone that Bill and Janet would not want their children to live with? These things will be left up to a court to decide without the input of Bill or Janet usually without a Will. However, a Will could express these wishes. Most of the time, Courts will honor the wishes of the deceased parents as to who the Guardian of their children should be so long as the Guardian is willing to serve in that role.
These are some of the issues that can be solved by a Will even for those without large estates. Anyone who owns real estate or has children should consider these things carefully when deciding whether or not to have a Will drawn up. A Will can make an already painful time for your family less stressful because these considerations are already handled.
This blog is for informational purposes only. No attorney-client relationship is established through blog postings, comments or otherwise through this blog. If you a contemplating a will, trust or any other form of estate planning you should contact a licensed attorney.