7 Scary Facts About Not Having a Will
Passing away without a will can only leave toil and trouble for your beneficiaries. As people get older, they should create a will to divide their assets among their loved ones. A will can ensure your wishes are followed and prevent unnecessary stress among your beneficiaries.
Let’s explore seven consequences of not having a will.
You may spook your family
Having a will makes it easier for your beneficiaries to split your assets with minimal arguments. Splitting liquid assets may be simple, but physical items like a house are not as easy to divide. Unless they are sold, your beneficiaries may struggle to divide physical assets fairly. A will can help designate specific items you wish to bestow upon your beneficiaries.
Your estate will enter intestacy
Intestacy is a legal process for people who die without a will. The deceased person’s assets are frozen, and a court system will apply state intestacy laws to determine who inherits the estate.
This can take a long time to finalize — as long as a year or two, which can cause stress among your beneficiaries. It can also cause fighting during the probate process about who inherits what part of your estate. By having a will, your beneficiaries may not have to worry about a delay in receiving an inheritance.
Probate fees will haunt beneficiaries
Probate court, where the intestacy process happens, isn’t free. Your beneficiaries may have to pay between 2-7% of the total estate to pay probate fees. This can consist of fees for the court, filing, and lawyers. Other possible costs can include probate bonds, personal representative compensation, and professional fees.
While your beneficiaries won’t have to pay out of pocket for the probate fees, it does reduce the overall value of your estate.
Beware of taxes: Beneficiaries may pay more
Estate and inheritance taxes are more things to consider when creating a will. The exact tax you may have to pay will vary depending on your state. In Pennsylvania, there is no estate tax, but you will need to pay a federal estate tax if your estate is valued at more than $12.06 million.
Pennsylvania’s inheritance tax ranges from 4.5% – 15%, depending on the beneficiary’s relationship with the deceased. However, a surviving spouse doesn’t need to pay an inheritance tax.
Creating a trust is one way to reduce the overall tax your family will pay after both spouses have passed away. A will is necessary to create a trust, and it’s best to talk to an estate planning lawyer to determine the best option for your particular situation.
Partners may not have inheritance rights
Depending on if you are married to your partner or not, this could drastically change how your estate is divided without a will in place. While some states recognize domestic partnerships and common law marriages, others don’t. This means your estate could pass on to your children with nothing left for your partner. A will could prevent this scenario and ensure your partner receives an inheritance.
Another scenario is if you want your spouse or partner to inherit everything. In some states, this isn’t possible without a will. Intestacy laws may split the assets among your spouse and children. It’s best to determine how you want your assets divided and create a will to enforce it.
Not able to choose an executor
The executor of your will is the person who will administer your estate. It’s a role with significant responsibility, and it’s ideal to have someone you trust to fill the position. You could choose a family member, friend, a corporate executor, or an attorney.
Not being able to determine custody of children
If you don’t have a will and pass away with minor children, their custody ends up in the hands of the state. While the court system will attempt to place the children in a home with a family member, they may be unaware of family dynamics which could influence their decision.
By having a will with guardianship provisions, you can ensure that the court knows who you trust to have custody of your children. A will could also create a trust for them to inherit when they reach a certain age of adulthood.
Contact estate planning lawyers to create a will
Many people intend to create a will, but claim they don’t have the time to get around to it. Creating wills and other estate planning documents is not as time-consuming as you think. With an experienced estate planning attorney on your side, you can create documents that are tailored to your specific needs and goals.
At Henry and Beaver, we understand that thinking about end-of-life scenarios is difficult. We’re here to help you make decisions that resonate with you, whether that is estate planning or one of our other services.
To schedule a consultation with our skilled estate planning attorneys, please call 717-274-3644 or contact us online.