The short answer is: probably. Executing a Last Will and Testament benefits most people.
Before we get into the benefits of having a Will, and a couple of myths concerning Wills, let’s discuss who probably doesn’t need a Will.
Who Doesn’t Need a Will?
You probably don’t need a Will if you don’t have children under the age of 18 (minor children) and you:
1) don’t have property that will go through probate; or
2) don’t care who gets your property.
If you don’t know what probate is, or you’re not sure which of your property (this includes real estate, bank accounts, personal items, basically, all of the things you own), will go through probate, I will post a comprehensive article on probate soon.
For purposes of this article, just know that probate is the court procedure in which your property is distributed to your heirs, and creditors are paid, after your death.
So, if you have children under the age of 18, you definitely need a Will, at least. And if you care about who gets your property, then you also need a Will, at least.
I say “at least” because it may make sense for you to have a revocable living trust instead of a Will. However, unlike many lawyers and financial advisors, I don’t believe that a trust is always the way to go. Please see my article on revocable living trusts if you want more information on revocable trusts, but I recommend that you finish this article first.
Okay, so if you have children under 18 and/or property that will go through probate, and you care about who will get that property, then you need a Will. It doesn’t matter how old you are or how much property you have.
Now that we know who doesn’t need a Will, let’s discuss two pervasive myths about Wills: that they either trigger probate, or they help you to avoid probate.
Will Myths
A Will doesn’t trigger probate, nor does it help you avoid probate. Let me repeat this: having a will DOES NOT trigger, nor does it help you avoid, probate.
As long as you have property that must go through probate, or you have minor children for whom a guardian must be appointed, then your estate will go through probate, Will or no Will.
BUT, executing a Will gives you more control over the probate process, which we’ll talk about in a minute.
A Will does not help you to avoid probate. The only circumstances in which you can avoid probate is:
1) you have no minor children;
2) you have no property that must be probated; or
3) you execute a revocable living trust and transfer all your property into the
the trust.
Reasons You Need a Will
So, we’ve already learned that you need a Will if you have children under 18, or you have property that will go through probate and you care about who gets that property. Now we’ll get specific about why you need a Will in those circumstances, and discuss some additional benefits that Wills provide.
1. Naming Guardians for Your Minor Children
If you have minor children, then the most important reason to have a Will is to name guardians for them in your Will. This type of guardian is a guardian over a person. These guardian(s) will have physical custody of your children until they are 18 years old.
Obviously, who will serve as the guardian(s) of your children is an important decision. And if you don’t have a Will that names guardians for your minor children, and something happens to you and your children’s other parent, then the decision about who will raise your children will be left up to a judge. A judge who doesn’t know you or your children, or what’s important to you, will make the decision about who gets custody of your children.
With a Will, you won’t have to worry about a stranger making this decision for you. You will have it documented. And you should have more then one potential guardian or set of guardians named in case your first choice predeceases you or decides that they can no longer serve as guardians.
2. Making Sure That Your Minor Children Don’t Inherit Money Directly.
In Florida, if a minor inherits more than $15,000.00 in property (that includes cash, life insurance proceeds, real property, personal property, etc.), a court must appoint a guardian over that property for the child.
A guardian over property is different from a guardian over the person we discussed in the last paragraph. This type of guardian will manage the child’s inheritance until the child is 18, at which point, the inheritance is released to the child.
There are two problems with this. First, much like the guardian over a person, the guardian over the property may be someone that you would never want in this position. So, unless you state your intentions in a Will (or trust), or make provisions in a Will (or trust) so that your children never inherit enough money to make this an issue, it could happen.
Moreover, any guardian appointed by the court will have to report to the court on the status of the child’s property, which will include preparation of inventories and accountings. This results in additional costs, which will come from your child’s inheritance. It could also cause delays in the child receiving money for needed expenses.
In addition, when the child turns 18, all of that money will be distributed to the child, unless the child does not have mental capacity (meaning that he or she is of sound mind and can handle his or her own affairs). But, even if the child has capacity, that doesn’t mean they should get the money. I remember 18. And I know what I would have done with a significant inheritance at that age without any supervision. And if you’re sure that your child would handle the inheritance well, what about the child’s friends? Or a cousin who needs help out of a jam? Or a stranger who finds out how much money your child has access to?
As you can probably see, it’s imperative that you take steps to protect your children should they inherit property from you.
You can do this by setting up a testamentary trust in your will to hold any funds in excess of $15,000.00 that your child inherits (and really, the trust should hold the entire inheritance). You can name who you want to serve as the trustee of the trust so that the court doesn’t have to appoint a guardian of your child’s property (again, you should have at least one backup named just in case).
This trust will hold the property for your child until he or she, at a minimum is 18 years old. But you should consider having the trust hold the inheritance for longer. You could even create a lifetime trust that will protect the inheritance from reckless spending, predators looking to separate your child from his or her inheritance, creditors and divorce.
And if you’re worried that your child will need the money, you can put terms in the trust that allows them to get income from the trust, money for college, to pay medical or other unanticipated expenses, and you can also distribute principal at certain ages, or all at once at a certain age. You can get creative with the trust and do what makes you the most comfortable.
3. Making Sure That Your Adult Children Don’t Inherit Money Directly.
Even if your children are grown (at least 18 years of age), there are circumstances in which you don’t want them to inherit money directly.
First, even though the child is an adult, it doesn’t mean that they should receive a significant amount of money outright (see above).
The child could be bad with money.
Or have debt or judgments which they could be forced to pay with the inheritance.
Or they could have married the wrong person and end up divorced, and if the inheritance is co-mingled with his or spouses assets, then the divorcing spouse could end up with part of the inheritance that you wanted to go to your children and grandchildren.
In addition, if your adult child has special needs, then receiving an inheritance could disqualify them for any benefits they are receiving as a result of a disability. This could cause significant problems especially if the amount of the inheritance isn’t sufficient to cover the expenses that the benefits do.
In these circumstances, you should execute a Will that includes a testamentary special needs trust that will hold the inheritance for your adult child’s benefit, and protect his or her ability to receive necessary governmental assistance (see Paragraph 6 below).
4. You Get to Decide Who’s in Charge (Other Than the Judge)
When you have a Will, you get to decide who is in charge of taking the necessary actions to probate your estate.
A personal representative, (also known as an executor in other states), is appointed by the judge presiding over the probate of your estate. The personal representative is , and is responsible for carrying out the necessary actions to ensure that your estate is probated properly and efficiently.
We’ll discuss the responsibilities of personal representatives in detail in a future article, but some of the responsibilities include notifying potential creditors (for example, if the decedent – the person whose estate is being probated – had debts that must be paid), filing documents with the court, giving heirs or beneficiaries their distribution (inheritance) from the estate, filing inventories of the assets of the estate, preparing and filing accountings of the estate assets, etc.
The personal representative usually hires an attorney to assist him or her with the probate, but this is not required. So the person you name should be someone that you know well and that can handle this important responsibility to make sure that your wishes are carried out properly, and won’t be tempted to take advantage of the position.
If you have a Will, you will name a personal representative to handle this significant responsibility. And as long as this person is willing to accept the responsibility and qualifies to serve as personal representative under Florida law, then he or she will be appointed.
And it’s important to have a back-up personal representative named in your Will in case your first choice decides that he or she doesn’t want to serve when the time comes, or if he or she has passed away or is incapacitated.
If you don’t have a Will that names a personal representative then someone that you don’t want in this position could be appointed, or a fight could erupt between different members of your family to determine who will serve. This will delay the probate proceedings, could result in your beneficiaries (heirs) receiving less money from your estate, and cause your beneficiaries a delay in receiving their distributions (inheritances).
5. Avoiding Family Fights
If you don’t have a Will, then your family will receive your assets according to “intestate succession.” The Florida intestacy laws dictate who receives assets from a decedent (the person whose estate is in probate) when the decedent does not have a Will (or trust), which specifically states who is to receive an inheritance and what they will receive.
Even with a Will there are some restrictions under Florida law as to who can receive what and when, and this deals mostly with your homestead if you are married, have minor children, or a disabled adult who is dependent on you, and when a married person tries to give less of their assets to their spouse than is required under Florida law. Again, we’ll address these issues in a subsequent article.
So, all that is great, but where do the fights come in?
Let’s say one of your children really wants a particular item. A ceramic clown. It’s been in the family for 50 years and he thinks he’ll die if he doesn’t get it. Your daughter, his sister, also wants the ceramic clown and she will just die if she doesn’t get it. However, you promised it to your son. Your daughter doesn’t know this and she thinks she has every right to the clown, especially since it belonged to your mother, her grandmother, and she was closer to grandma than her brother was.
Unless you have a Will that states who will get the ceramic clown, a court fight could erupt, which will lead to family dissension.
6. Disabled Beneficiaries
If you have any beneficiaries who are disabled, and they receive disability benefits, an inheritance from you could leave them in a worse financial position than before they receive the inheritance.
How? Because the inheritance could, depending on the amount, disqualify them from receiving disability benefits.
This would put them in a precarious financial position, especially if their inheritance will not provide sufficient funds to pay their medical and living expenses.
So it’s imperative that you have a Will that includes provisions for special needs trusts for any disabled beneficiaries.
A special needs trust holds the inheritance for a disabled beneficiary, and the trustee of the trust will manage it and ensure that any distributions from the trust will not disqualify the beneficiary from disability benefits.
And, even if you don’t currently have any disabled beneficiaries, it’s still important to have a Will that includes special needs trusts provisions.
All of the Wills (and Trusts) I draft contain provisions for these trusts even if my client doesn’t currently have a disabled beneficiary.
Why? Because it’s possible that one of your beneficiaries will become disabled between the time you execute your Will and when you either become unable to change your Will (because you lack capacity to do so), or you die. That’s true even if you revisit your Will every so often to make sure it is up to date (I give all of my clients a free review of their estate plans every three years).
You just never know what could happen. And including this provision will help you avoid any unintended consequences of an inheritance.
7. You Can Disinherit Someone
Although I generally discourage disinheriting a family member (there are better ways to handle such situations), if you absolutely must specifically disinherit someone who is directly in line to receive an inheritance from you, then the only way to do it is with a Will.
Remember, if you don’t have a Will, a close family member may receive an inheritance pursuant to the intestacy statute.
Now, you can’t completely disinherit your spouse or dependents – they are protected by statute, including with regard to your homestead.
But if there is someone else who will receive part of your estate, and you don’t want them to, then you need to specifically disinherit them in a Will.
8. Making Donations to Charitable Causes
If you want to give part or all of your estate to a charity, then you must have a Will. There are no provisions for charities in the intestacy statute.
9. Naming Caregivers for Pets
Pets are members of the family. I know our dog is, and if something happened to us, then we would want her to go to someone who would love her and care for her like we did. And you can name caregivers for your pets in your Will.
Even if you believe that a friend or family member will take care of your pet, it’s a good idea to make plans ahead of time and make sure that the person or persons who you plan on naming in your Will are able and willing to take your pets. It’s also a good idea to have a back up just in case.
It’s also a good idea to leave them some funds to make sure that caring for your pet isn’t a financial burden.
10. Dealing With Debts Owed to You
You can forgive debts owed to you with a Will.
For example, you loaned one of your kids money to start a business, and they haven’t paid it all back. You can make a provision in your Will to forgive the debt. Or, if you don’t want to forgive the debt, you can make a provision that your beneficiary’s inheritance is to be reduced by the amount of the money they owed to you at the time of your death.
There are numerous ways to deal with such situations in your estate plan, and you can develop some creative solutions depending on your situation.
11. Business interests
If you own a business, then it’s imperative that you plan for business succession, or for the liquidation of your business and distribution of the assets of the business to your heirs.
At a minimum, you need a Will to do this effectively and efficiently. But I advise most clients who own businesses to execute a Revocable Living Trust because a Trust gives you even more control over what happens to your business.
If you own a business and don’t have a Will (or Trust), run, don’t walk, to your lawyer and execute an estate plan appropriate for your circumstances.
So there you have it. Since most people will benefit from having a Will, I hope this article has convinced you to take the time to meet with a lawyer to discuss this important planning.
And if you think you don’t have time to do this, you might be surprised at how quickly you can get this planning done to ensure that your family, business and future are cared for, and you have peace of mind.
If you have questions about Estate Planning, be sure to download a FREE copy of 8 Critical Estate Planning Questions Answered. You can also contact Steve at 904-201-4149 or by filling out a contact form.
