Where’s Your Will?

What do Chadwick Boseman, Norm MacDonald, Bob Saget, and Gilbert Gottfried have in common? They all died without a will. The situation is common but the consequences require a bit of analysis.

According to the Gallup polls, less than half of Americans have a will. A person who dies without a will is intestate. Intestacy may not be a disaster. A will only applies to assets in your sole name. Assets in your sole name pass through probate, a court-supervised process of identifying assets and heirs, valuing the assets, accounting for the estate, and finalizing the distribution of assets.

Many clients own very few assets in their sole name. Here are some examples. Many of us own assets with a beneficiary designation, such as a life insurance policy or qualified retirement plan. Those are not owned in your sole name. You may have a beneficiary on bank and brokerage accounts. Most married couples own their home as joint tenants. The surviving spouse inherits sole ownership automatically when the first spouse dies. Accordingly, many people own little in their sole name.  Your will only controls assets in your sole name. Therefore, a will may have little importance in your estate plan.

When a person dies intestate, without a will, the state law determines how their assets pass. Each state is particularly convoluted in its way. When a married person dies without a will, their estate will be divided between their spouse and children, or if no children, between their spouse and surviving parents, or if no spouse, then equally among their children.

The other day, I received another panicked call from an old friend who could not find their original will and was leaving on vacation. “What happens to my estate if my will is missing,” he asked. Once again, I explained the intestacy laws to a client. Without a will, this estate would pass ½ to his spouse and ½ in equal shares among his children. The old client’s missing will give his estate to a now estranged fiancé. In that case, I advised him that his family might be better off with a missing will and the intestacy laws. Should someone find the old will leaving the estate to the former fiancé, that plan might still be in effect despite the estrangement.

I added one more caution. A Personal Representative of an estate can petition the court to admit a photocopy of a will to probate, if no original can be found.

Intestacy is the rule for the estates of those who fail to execute a will. It might also apply to those who have executed a will but can no longer find any trace of that will. At the start of a new year, it’s a good time to ask “Where’s your will?”

Evan J. Krame