Tuesday, October 9, 2012

What You Need to Know about Wills

           The Will is an important but often-misunderstood document. People may tell you that a Will is what the "wealthy" use to give away their money when they die. What is less understood is that the Will is a valuable document for everyone.
           Before addressing why a Will is valuable, it is first important to understand what a Will actually does. A Will is a set of legally binding instructions followed after the death of the Testator ("Testator" is the legal term for the person executing the Will). The Personal Representative (sometimes called the "Executor") is the person the Will names with carrying out the Testator's instructions concerning the Estate ("Estate" is the legal term for a deceased persons assets and possessions). If a person dies without a Will (in the legal parlance, "Intestate") Michigan imposes a set of distribution instructions on that person's property based upon what the state legislature presumes people want. These instructions are sometimes often fail to take into account the unique circumstances of an individual's life.
           Even if you are not "wealthy", anyone with a residence, life insurance coverage, IRAs or retirement plans, bank accounts or other such assets needs a plan for distribution of those assets at death. The Will is the simplest form of that planning.. In a Will, a person can detail a simple or complex plan of distribution of assets for loved ones that is legally binding. The only limitation on your distribution plan is your imagination. While the Will does not avoid the probate process, it simplifies it. Not only can a Will reduce conflicts between a surviving spouse and other family members by providing clear instructions as to the Testator's desires, it also provides guidance and structure in a difficult and chaotic time. Additionally, leaving written instructions for the disposition of your assets is even more important if you are married with children, because the intestacy statute splits assets between your spouse and children, potentially creating financial hardship for the spouse.
           If you have minor children, a Will is the document used for nominating Guardians to care for children should something happen to you and your spouse. Without a Will, the Probate Court must decide between the assorted parties who petition the court to act as Guardians for your children. While your parents or siblings may feel responsible for taking care of family, they might not be your first choice to act as Guardians because they live in other parts of the country or their lifestyles are not compatible with yours or conducive to raising children. The Will allows you to designate guardians you feel are best for your children
           The necessity of Will increases when the Testator is married with or without children. Not only can a Will reduce conflicts between surviving spouses and other family members by providing clear instructions as to the Testator's desires. It also provides guidance and structure in a difficult and chaotic time. Additionally, leaving instructions as to the disposition of your assets is even more important if you are married with children because the intestacy statutes split assets between spouses and children, potentially creating financial hardship for the spouse.
           As your personal situation and asset situation becomes more complex, a Will can work in conjunction with a Trust to minimize the involvement of the Probate Courts in the distribution of the estate. Trusts, and their benefits will be discussed at a later date.
           Clearly, a Will does more than allow the rich to pass on their wealth. The Will allows everyone to decide what will happen to their assets after their death, provides peace of mind in a very trying time to for loved ones, and allows parents to decide who will raise their children should tragedy strike. A Will is only one piece of the estate planning process, but it is an excellent starting point. A well-drafted Will creates a good plan for distribution upon your death. It can also provide the basis for additional estate planning as a person's situation becomes more complex.

No comments:

Post a Comment

We welcome and appreciate your comments but remind you that while not all viewpoints are equally respectable, all people should be treated with respect. The authors do not actively moderate comments but reserve the right to remove comments that are offensive, derogatory, or contain spam.