Without a Will the “wrong" person may inherit all of your assets, and/or the “right" person may not inherit anything. This counsel was vividly reminded of this when a long-time client died suddenly last year.
Pete was an active, single man, 53 years old, when he died unexpectedly at home. His father died in an auto accident when Pete was five years old, and he was raised as an only child by his mother, who did not remarry. Pete’s mother, who died 10 years ago, did not have any brothers or sisters. Pete was divorced many years earlier, and had no children.
Pete owned a modest house that had no mortgage and a four year old car that was paid for. He also had a 10-year relationship with Mary, who resided with him. When the executor and I opened Pete’s safe deposit box at the bank we discovered a document that Pete had signed. It was obvious that Pete thought he had drafted a valid Will. However, it was not properly witnessed. From this document it was very clear that Pete wanted Mary to inherit all of his assets.
Since Pete did not have a valid Will, Oregon statutes determined who received Pete’s assets. Half of Pete’s estate went to his mother’s first cousin, an 80+ woman residing in a nursing home in another state. The other half went to a first cousin on his father’s side. These relatives not only lived in other states, but had no personal relationship with Pete. Mary did not inherit anything!
Without a Will, the Court chooses the executor, and they chose Pete’s second cousin, who lives 200 miles away. Pete and his second cousin had not seen each other in 40 years, and she knew nothing about his life or financial affairs. Having a Will would have allowed Pete to choose the executor of his probate estate. He could have chosen a friend, a relative or a professional, such as an attorney or a CPA. The probate process was prolonged due to the executor’s distance from Pete’s house and due to her lack of knowledge of Pete’s affairs.
A valid Will would have allowed Pete to leave his entire estate or any part of his estate to Mary. Also, a Will would have prevented the dispute that developed between Mary and the executor. The executor is required to follow Oregon law. Mary wanted Pete’s wishes to be followed. The probate process is designed to settle the deceased’s debts, settle disputes among people claiming title to the deceased’s assets and transfer the deceased’s property debt-free, except for secured debts. Mary delayed this process 8 months by filing a claim to Pete’s assets.
There are no disadvantages but many advantages to having a Will. A Will is not activated until death so you may change it as often as you wish. I suggest that everyone review his estate plan every five years to determine if it meets current needs and objectives. This review may or may not require changes to the Will. Fortunately, the cost of having a Will drafted and updated is quite reasonable if you choose the right attorney. You may want to change your Will for many reasons, such as a marriage, a divorce, a death in the family, the birth of children or grandchildren, or a significant change in your assets.
Certain people need Wills more than others. A single adult, like Pete, with deceased parents and no children or grandchildren must have a Will to insure that loved ones receive his estate, rather than distant relatives he doesn’t even know. Married couples who have children from previous marriages should carefully craft estate plans to minimize disputes and assure that each loved one is treated as the couple wishes. If these individuals, regardless of age, discuss estate planning with an experienced attorney, disputes are avoided, probate costs are kept to a minimum and the “right" people will inherit.
Pete’s probate was more expensive than it would have been if Pete had had a Will. The total probate expense was over $14,000. With a Will the cost would have been between $2500 to $3500. The distant relatives would not have been involved in the probate process because Mary would have been both the executor and the only beneficiary of Pete’s estate.