(FinancialHealth.net) – Six out of 10 Americans don’t have a will. Are you one of them?
In the event a person dies without a will, a state judge will appoint an administrator to handle the estate. Having a will reduces speculation and provides clear and precise guidance on how the deceased person would have wanted their assets distributed.
Without a will, all assets will be divided between family members according to state law, instead of according to what might have been the wishes of the deceased.
What Is a Will?
A will is a legal document that provides guidance on who will manage an estate and how assets will be distributed after death. Besides assets, wills can serve a much larger purpose. A will can also appoint guardians for children under the age of 18, name an executor, and forgive debts.
Having a valid will directs how the deceased wishes their assets to be distributed. It prevents the state from distributing assets only according to the laws of the state. These particular state laws are called intestate succession laws.
What Are Intestate Succession Laws?
“Intestate succession laws” are state laws that decide which family member will inherit property and assets. In most cases, a spouse, a child or parent will have priority under these laws.
Here’s an example of how intestate succession laws work. Let’s say a person dies without a will. The family is aware that their final wish was to leave a gift to someone outside of their immediate family, like a friend, boyfriend, girlfriend or a even a favorite charity.
Even though family members know this is what was wanted, intestate succession laws won’t allow it because it wasn’t stated in a valid will. Once intestate is determined, the probate process begins.
What is Probate?
Probate is the legal process of determining the value of an estate, selecting an executor who will distribute property and assets, and ensuring that these transfers go to the rightful heirs.
If there isn’t a will to provide guidance, a judge will appoint an administrator to handle the estate to ensure all property and asset transfers decisions are made according to probate laws. Every state has its own set of laws it must follow when handling invalid or non-existing wills.
Having a will doesn’t necessarily mean you can avoid probate, but it does make the process go much smoother. For those who want to avoid probate altogether or for the most part, revocable living trusts, life insurance policies, some retirement accounts, payable on death accounts, and jointly held real estate may be some of the best methods to use.
These methods may pay out to the beneficiary on their own, without the process of probate, saving both time and legal fees.
Having a valid will is a good way to limit state involvement in the distribution of an estate’s property and assets. It provides peace of mind knowing that last wishes are being met while the family is as free from stress and confusion as possible during this difficult time.
~Here’s to Your Financial Health!
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