Consumers are constantly told by financial planners and others that they must have a Will. So, it would not be unusual to ask “what happens if I do not have a Will?” The answer is, as with so many planning questions, “it depends.”
If you have no assets titled in your own name and everything, with the exception of your retirement accounts, is titled jointly with your spouse, the effect of not having a Will might not be too great at first especially if you do not plan on leaving anything on your death to anyone except your spouse. Your wife or husband will inherit those assets that are jointly titled, like, for instance, the house and your joint bank and investment accounts. Also, if you properly designate the beneficiary of your retirement accounts as your wife or husband and then you have named your adult children as contingent beneficiaries with the company or companies holding your retirement accounts, you might not be too badly off without a Will.
Does this mean you do not need a Will? Not necessarily. One expression we have in the office is that Wills are often written for the <benefit of> children. As examples, you and your spouse could both die and your spouse might not have time to rewrite his or her Will. Then what? Also, you might be married for a second time with children from a prior marriage. Do you want to provide for both your spouse and your children? Then you definitely need a plan. What everyone really needs is an estate plan, which is different from merely having a Will, and, contrary to popular belief, this conclusion is not limited to the elderly.
Young couples with minor children need Wills because they might both die and parents really should name either an individual, possibly a family member, or a bank or financial institution as Trustee until their children are old enough to handle money on their own. The alternative could be a Court battle. Parents can specify who they would want to serve as Guardian for minor children.
If someone might inherit who is disabled, this often should be handled through a Will, usually by setting up a Trust arrangement for the disabled person.
If you have assets held in your own name, the State writes your Will through what are referred to as the intestacy laws. Contrary to common belief, the Commonwealth of Pennsylvania does not get your estate. It does, however, decide who gets your estate if property is not titled jointly or is without a beneficiary designation or transfer on death. The results may be as expected or shocking.
Here are some examples of disposition of probate assets (assets held in your name with no beneficiary designation) where there is no Will and the decedent dies as a Pennsylvania resident.
1. If decedent dies with a spouse and no living children or living parents, then everything goes to the surviving spouse.
2. If decedent dies with a spouse and living parent or parents but no children, the spouse takes first $30,000 of the estate plus 1/2 of the remaining estate. Parents take the rest. (That one and the next are probably surprises.)
3. If decedent dies with spouse and children and the children
are also children of the spouse, then the spouse is entitled to $30,000 and 1/2 of the estate. Children divide the remainder equally. If spouse is not the parent of the children, then the spouse receives only 1/2 of the estate.
4. If decedent dies with parents and no children or spouse, then surviving parents share equally.
5. If decedent dies with children and no spouse, the children take all equally in the same generation.
6. If decedent dies with no spouse, children, or parents, then decedent’s brothers, sisters, or their children take all.
Without a Will It is quite possible for someone to leave everything to a relative or distant relative she never knew or from whom she has been estranged for years. This is one reason for a person to take care of business before the State writes your Will. Good estate planning can direct assets where the owner wants them to go.
For more, listen on Wednesdays at 4:30 p.m. to radio WCHE 1520, “50+ Planning Ahead,” with Janet Colliton, Colliton Elder Law Associates, and Phil McFadden, Home Instead Senior Care. Janet Colliton, Esq. limits her practice to elder law, Medicaid, life care, special needs, and estate planning and administration with offices at 790 East Market St., Suite 250, West Chester, Pa., 19382, 610-436-6674, colliton@collitonlaw.com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, co-founder of Life Transition Services, LLC, a service for families with long term care needs.
