Yes!! You really need a Will. Now for the long explanation. People often think a Will is unnecessary if their property if jointly titled and beneficiaries are named on accounts and policies. Generally, this is correct, but what if both people die, or if there is no spouse, or you forgot to jointly title something?
If a person dies without a Will, this is called “intestate”, and their property must go through the probate process. Someone, preferably a spouse but possibly a child or creditor, must Petition the Court for appointment as Administrator. They typically need to be bonded by an insurance company, which requires a credit check and payment of a premium. This costs money and could place the responsibility of Administration with someone you don’t trust. By having a Will, you determine who will manage your estate (the “Executor”), and bonding can be waived.
Here are some other problems that often occur with an intestacy:
- Vehicles. Most people don’t title their cars jointly, so it must be probated. Titles can be made “Joint” if both owners go the Clerk’s office and sign to change the title. Herein is where the problem lies. We all put things off until we have “time” … then it’s too late.
- Real Estate. When real estate passes through an intestate probate process, the Administrator typically must have the property appraised and must seek permission from the Court to approve the sale. This means that any purchase contract must be contingent on Court approval, which could take a couple of weeks to complete. Once the Court approves, the property cannot be sold until thirty days after Court approval. This increases the costs of administration and causes delay. A Will can grant the Executor the right to sell real estate to avoid this problem.
- Bank and Investment Accounts. If there is no joint owner or payable on death beneficiary, the funds in a financial account will need to be probated, which could tie up the money for six months or more, depending on the size of the estate.
- Who gets what? Without a Will, all property passes to heirs according to law. In Kentucky, the spouse is generally entitled to half of the real estate and personal property, although there are some exceptions. The other half passes first to the children, and if none, to the parents, then siblings, then spouse. Imagine being the spouse who had to share ownership of their house with their in-laws! Or stepchildren! Intestacy opens the door for the ex-spouse to insert themselves into the estate as Guardian for their children.
Do yourself and your family a favor by consulting with an attorney to help you with estate planning. A typical estate plan includes a Will and Powers of Attorney to manage finances and healthcare in the event you are unable to make decisions for yourself. A Trust may also be a helpful tool but is not always worth the effort depending on the needs of your estate plan. Above all else, don’t put this off for when you have “time”.