8 Common myths about Last Wills and Testaments.
Addressing, answering, or dispelling some common misconceptions about Wills, or about not having a Will.
Myth #1. If I don't have a Will, the State will get my property.Well, the good news is that this is almost never true. All states have a statute that determines the order of priority of inheritance in the event of intestacy, though it's not always exactly what you would expect. (More on this in myth #2).
First, let's understand two basic terms: "Testate" and "Intestate". Testate simply means you have a valid Last Will and Testament in place at your death. Intestate means you die without a valid last Will and Testament.
Under the laws of most states, your spouse and children would first inherit. And while it varies among states, if you have no spouse or children, then the intestacy laws generally look to your parents, then your siblings, then nieces and nephews, and so on, in some states even out as far as second cousins. Picture a family tree, staying as close in blood relation to 'your' branch as you can. Only after you've run out of statutory 'branches' does your property pass to the state.
Now, that being said, most people do not desire for default state law to govern how their property passes at death. The only way - let me repeat - the ONLY way, that the statutory intestate distribution scheme can be changed is through a Will. Thus, if you die without a Will, it matters not that your loved one(s) knows what you would have wanted done. Your estate must be distributed in that instance in accordance with the statutory scheme. (Throw in common scenarios of second or third marriages, children from more than one marriage, or an estranged child or child with drug/alcohol dependency issues, and you will have left your estate in a real quagmire).
Myth #2. I don't need a Will, because my spouse will inherit my property.While this myth isn't entirely false, it is most often untrue. For example, in Georgia, if you die with no Will, but with a spouse and children, your spouse receives an equal share with the children, but no less than a 1/3 interest. Thus, if you die leaving a spouse and one child, they split your estate equally. If you die with a spouse and 5 children, your spouse receives 1/3, and your 5 children split the remaining 2/3.
Let's focus on what is often the big problem here. You may say "I have a husband and 2 small children. I'm fine with each receiving 1/3". But the problem is this: they each receive a 1/3 undivided interest in your assets. Take, for example, the house that you own. In this instance, your minor children will each be vested with a 1/3 undivided interest in the house. And what if your spouse wants to sell that house and move after your death? In order to do so, the spouse would have to petition the probate court to ask permission to do so on behalf of the minor children, and the court could very well make the spouse segregate the children's funds into separate accounts, meaning the proceeds might not could be rolled over and utilized to purchase a new home.
Even if the court allows it, your children are then entitled to their 1/3 interest outright at age 18. Meaning they could sell their interest in the house. Or prevent the spouse from selling the house outright. This can be a very significant problem, particularly in a second marriage situation where there are children from a prior marriage.
Myth #3. I don't need a Will, because my spouse is my power of attorneyWrong. Once you are deceased, a power of attorney is void. It lapses. It does not matter whether it is a "durable" power of attorney. A power of attorney always expires at death. No exceptions.
Myth #4. I don't need a Will, because my house is my main asset and my spouse and I are both on the deedThis is another one of those that isn't entirely false. In fact, it may be entirely true. What you have to determine is in what manner was the house held jointly--as Tenants in Common, or as Joint Tenants with Rights of Survivorship? If owned as joint tenants with rights of survivorship, then yes, the house will pass to the spouse at death regardless of whether you have a Will. (In fact, if owned this way, it passes to the spouse even if the Will provides something entirely different). However, if the house is jointly held as Tenants in Common, then it will absolutely not automatically pass. Thus, your 1/2 interest will pass either in accordance with the terms of your Will, or in accordance with state law for an intestate estate.
Notwithstanding the house, there are almost always other assets that must be administered--a car, a small bank account, a small parcel of land, etc.. And this will have to be done through the court in an intestate administration if you have no Will. It is much more cost effective to go ahead and have a Will in place.
Myth #5. I have an old Will that is fine, because I marked some changes on it and initialed itWrong. Once your Will is executed, you may NOT mark on it and make changes. Period. A Will is not like a contract where you can scratch through, write new terms in, and initial it. ANY changes marked on your Will after it is executed will be VOID. They will be given no effect whatsoever. And if your changes are substantial enough, the court may treat you as having revoked your Will, putting you into a situation of intestacy.
Myth #6. I don't need (or want) a Will because probate is so expensive and such a hassle.First off, of course, keep in mind that not having a Will doesn't mean your estate doesn't have to go through a "probate" process with the court. Further, having a Will almost always makes that process much LESS expensive. Whether you have a Will or not, your estate must be administered through the court in all but the rarest of instances. (The process is called "probate" if you have a Will; otherwise, the process is called an "intestate administration").
Admittedly, in terms of cost to administer or probate your estate, it will depend in part on the state in which you live. As a general proposition, probate in many states, particularly in the southeast, is relatively simple and relatively inexpensive. Georgia and Alabama in particular have very straight forward probate procedures. Granted, some states, especially out west and up north, are in fact cumbersome, and can be expensive. That is why you often see estate plans in those jurisdictions utilize what is known as a Revocable Trust or a Living Trust. (We'll address that in an article in the very near future.)
However, for residents of many states, probate is an easy enough process, if you have a valid Last Will and Testament. Indeed, it is far less expensive and far less of a hassle than the problems that can arise from not having a Will and being burdened by the provisions of intestate administration.
Myth #7. A Will is just so expensive!Well, I guess it's not entirely fair to call that a complete myth. It depends on your definition of expensive. Or perhaps your definition of value. What is your house payment? What is your car payment? What is it worth to you to have your affairs in order, make the administration of your estate easy on your loved ones, and insure that you provide for those whom you want to provide for, in the manner you want to provide for them? The cost of a Will certainly varies among the states, attorneys, their expertise, and the size/value/complexity of your estate, but it's pretty common to be able to put in place a basic estate plan from anywhere from $1,000 to $5,000, at least if there is no significant tax planning involved. It's never ceased to amaze me, but I've had clients who think nothing of an $800/month car payment, or buying the newest $2,500 television set, but have a spouse and 3 children and show sticker shock over a $2,000 Will.
Want to know what's expensive? Heirs, spouses, and children from prior marriages fighting in court over your property. Petitioning the court for permission to sell property because you had no Will to direct it. Paying an attorney to prepare inventories and returns for an intestate administration, which could have been waived by a Will. Posting a bond to administer the estate, which likewise could have been waived by a Will. Having to pay for appraisals that could have been avoided.
Myth #8. I can do my own Will onlineOk, that's not false. You can do your own. However, I highly advise that you don't. And as self-serving as this will surely sound, I will nonetheless say that you generally get what you pay for. I've been an estate planning attorney for 20 years, and almost every single Will that I have had problems with at probate were Wills that were either do-it-yourself store bought software, online documents, or Wills prepared by attorneys who don't have a significant estate planning practice. Problems range anywhere from failure to grant powers, or waive bond, to more significant problems such as improper execution, or ambiguity in the provisions. So yes, you can do a Will on your own. You could also give yourself sutures for a bad cut or set your own broken bone. My guess is you would not however. So why take a risk for something as important as disposing of the assets you've built over your life or in providing for your loved ones?
SUMMARYDon't be fooled by misconceptions and misinformation. Talk to your estate planning attorney and get your Will in place.