What Can a Will Do for Me?
Believe it or not, a simple Will is a very powerful document. With a Will, you can:
Designate beneficiaries to inherit assets after you die, including beneficiaries who would not normally inherit your assets under the laws of your state;
Disinherit an heir;
Increase the share of property that your spouse is entitled to inherit;
Create a postmortem gift to a charity;
Nominate an Executor of your Estate;
Waive a bond requirement for the person serving as Executor of your Estate;
Nominate a Guardian for your minor children;
Create a Trust to hold your estate assets for the benefit of one or more beneficiaries.
Despite all of these advantages, however, in 2017, a survey from Caring.com found that, on average, only 40% of Americans have a Will. Let’s take a look at one of the advantages I listed above, beneficiary designations, to help you understand why you probably shouldn’t be one of the 6 in 10 Americans without a Will.
The ability to designate beneficiaries is a huge advantage of having a will. When a person dies without a Will, their property passes to their heirs through what are known as the Laws of Intestate Succession. How property is divided under these laws can vary widely from state to state. New Mexico, for instance is a Community Property state. Under the laws of Intestate Succession in New Mexico, if someone leaves a surviving spouse, the surviving spouse is entitled to receive all of the deceased spouse’s one-half interest in community property. However, the surviving spouse’s interest in separate property depends on whether or not the deceased spouse had children. If the deceased had no children, all of the separate property goes to the surviving spouse. If the deceased had children, however, the surviving spouse is only entitled to one-fourth of the deceased spouse’s separate property.
While most people would probably be fine with their spouse inheriting all of their interest in their property, many people would be surprised to find out that the surviving spouse is only entitled to one-fourth of separate property (using New Mexico law as an example). Many people simply assume that their spouse will get everything they own. This community property/separate property distinction can make a huge difference depending on when, and how, property was acquired. If the deceased spouse obtained the majority of the assets in his or her estate prior to the marriage, for example, the surviving spouse could end up being entitled to very little.
On the other hand, there are people who do not want their spouse to end up inheriting everything they leave behind. Parents of children born in a previous marriage, for instance, may not want to leave their entire estate to their surviving spouse due to a concern that the surviving spouse might not leave anything to children born outside of the current marriage; and, once you’re gone, a surviving spouse who is a sole beneficiary of your estate can do with the inheritance whatever they want. By designating beneficiaries in a Will, you can elect to leave property to the people you want to receive it. Even in a Community Property state like New Mexico, you can dispose of your 50% interest in Community P
roperty however you like, so long as you do so in a Will. It’s only when you die without a Will that the laws of Intestate Succession kick in.
I hope that after reading this you can see how powerful just the ability to designate your beneficiaries can be; and I hope that you are thinking about whether you want more control over your assets than the laws of Intestate Succession provide.
If you are, you should seek out an Estate Planning Attorney near you to discuss how to use Estate Planning documents to take control.