What is a Will, and What Assets are Distributed by a Will?
A will is the legal document that governs the distribution all assets owned in the name of a decedent after the decedent’s death.
In life, when assets are acquired, in an individual’s name, they are automatically owned by the purchaser unless (or until) they are sold or otherwise distributed. Everything that you may purchase – from furniture to groceries – are thus part of your estate. When you die, if these assets have not been transferred to a trust or to someone else, or are not of the kind above described, these distributions are governed bu the terms of your will.
After your death, all of such assets will be transferred in one of two ways – by the terms of your will (if you have one), or (if you don’t have a will), by the laws of intestate transfer.
Intestate Distributions – Why All Adults Need a Will
Suppose you tell your family who should receive each of your assets, but you die without a will. Will your wishes be respected?
Legally, most probably not.
Under state intestate distribution laws, all those entitled to inherit under law must receive a “fair market share” of your estate. Thus if three children survive you and you do not have a surviving spouse, each of your children are entitled to a 1/3 “fair market value” share of your estate. It does not matter if you wanted one of your children to get more, or that you may have wanted to transfer assets directly to your grandchildren.
Since distributions must be made as dictated by state laws, your wishes regarding apportionment or specific asset transfer cannot be respected. You may have wanted one child to receive a specific item, but whoever is administering the estate will be required to distribute according to the law. “Fair market value” is often meaningless to items that have great sentimental value, as the item itself may be relatively worthless, but it may have a great value to a particular family member.
Without a will, difficult decisions may need to be made about sentimental items that cannot be divided. What happens when all those entitled to inherit want the same item? In these circumstances, family members sometimes can become involved in bitter contests fighting over the same assets, leading to litigation, asset depletion due to unnecessary major legal fees, and broken relationships.
Will provisions can avoid these issues.
Bob invites you to call today so we can get started.