Estate Planning 101: The Basics
Why should I have a will?
1. What is a Will and why do I need one?In a recent Harris Interactive survey of the general population, done for rocketlawyer.com, 61% of Americans do not have a Will. The reasons given for not having a Will: they haven't gotten around to it, they don't think it is urgent, and they don't have a lawyer.
A Will is an important document that dictates to whom your property will pass upon your death, and how your property will be distributed. Most people have an idea as to whom they would like to distribute property upon their deaths, and a Will is the instrument that allows a person to dictate his or her wishes. No matter how many assets a person may have (i.e., the size of his or her estate), a Will is a very important document to have. A Will is one of the only documents in which you can name Guardians for your minor children after you die. If you wish to give property to a person who is a minor or disabled, you can establish a trust for their benefit in your Will which will allow a responsible person to decide how to use the money you have left for the minor or disabled person. Also, if you have a large estate, a Will can provide certain estate tax savings under the law.
2. What happens if I die without a Will?Most people think that if they die without a will, their spouse will automatically get everything. This is NOT the case... Dying without a will is called "intestacy." If you die without a Will ("intestate") the laws of New York State dictate who will administer your estate and to whom your property will pass. Many people are surprised by what the intestacy laws say. For example, if you are married and have children, your property will not automatically pass to your spouse. Instead, your spouse will receive the first $50,000 from the estate, and the balance will be split between your spouse and your children. If your children are minors, the assets will be placed into a special custodian account with a person the court names as custodian. Your spouse may need to account to the court as to how he or she spends the share that has passed to the children.
The situation described above is usually not what a person wants to have happen with their property after their death. However, without a Will to dictate your wishes, you will not be able to stop this process. Also, if you die intestate leaving no spouse and no children, your parents and siblings will inherit the assets left in your estate, even if your wishes were contrary to this.