Al Newton: There's No Excuse, You Need A Will
Monday, July 6th, 2015
A young couple has a three-year old son. Life is good. Everyone is healthy. The couple owns a home and each spouse has a great job. On a trip back from the beach, however, the young family is involved in a car wreck, killing the wife.
It never occurred to the wife - nor the husband - to get a will for each of them. "We're young and healthy!" they said. "We can get that done later when we're not so busy."
If you die without a will, the law says you've died intestate. If you die intestate, there are laws that determine how your estate is distributed without the input of the surviving spouse or children. How these laws of intestacy split the pie may surprise you.
In our example, the husband and wife most likely owned their home as tenants-in-common, meaning they both owned an undivided 50% interest in the home but each could enjoy and use the entire home. According to the laws of intestacy, the wife's 50% share in the home is now divided and split between the husband and the three-year old son! Now, the husband has a 75% percent interest in the home (his original 50%, plus his acquired 25% interest from his wife) and the son has a 25% interest (his mother's 50% interest split in half). There's more: Because the son now owns an interest in the property, if the husband wanted to sell or borrow money on the home before the son turned 18 and became an adult, he would have to petition the Probate Court for a conservator to be appointed for his son. The conservator would represent the son and his interest and both the conservator and the Court would have to approve the transaction, even a simple refinance. This is a time consuming and often expensive process that could potentially delay or stop the sale or financing of the home!
This entire scenario could have been prevented had the wife died with a will in place. She could have left her interest in the home to the husband, who would be able to provide for their son without the involvement of the court system.
The takeaway is: It is not a pre-requisite that you be eligible for senior citizen discounts or a millionaire before needing a will. Rich or poor, all adults should have a properly drafted and executed will.