Everyone needs a will and testament but, alarmingly, only 44 percent of American adults have one, according to a May, 2016 Gallup poll. Whether your assets are worth millions or you live on social security in a rental, inevitably some payout comes about, and when the check comes, how is the check cashed? If a will is drawn, then an executor has been named who has check cashing rights. This is a simple reason for needing a will, but, most importantly, wills are written to ensure wishes for transferring property and assets are followed and to avoid protracted legal proceedings over the distribution of those assets.
Who Is Left Behind?
Today’s blended families complicate the path to beneficiaries. Couples with children divorce and remarry. A will can reroute assets to the children from the first marriage. In the case of minor children, only a will can name a guardian to care for them. The care for a disabled family member or friend can be spelled out with a will and define who will watch over assets for them. A will can direct the terms of these payments as well. This will help elderly parents if they’re beneficiaries of a child’s life insurance policy. and a large payout from it could wind up cancelling their government benefits. When someone’s livelihood is at stake, it is important to seek legal services to ensure your plan cannot be challenged.
What is left behind?
Who gets the car and house? What will happen to Great Aunt Susan’s diamond broach? Will a relative try to contest the will? Having a plan in place will simplify the distribution of assets. In some cases where joint tenancy is formed, such as a joint investment account or a mortgage, the right of survivorship is passed without a will in place just by the way in which they are owned. Without a will in place, the remainder of the assets are distributed by the state, so it makes sense to take the time to formulate a will that ensures your wishes are met.
How long assets are tied up?
When someone dies intestate, or without a legal will, the estate goes into judicial probate, where a judge designates proper distribution. This can take months, even years and can suck up lots of cash, more than it would cost to write a will.
What about estate taxes?
The estate planning techniques used to avoid estate taxes usually involve transferring property to trusts so that the final estate is too small to pay estate taxes. Laws can change, so it is important to consult an attorney to make sure estate plans is updated periodically.