Most of us don’t know a lot about the law of wills, trusts, or probate–after all, they’re topics none of us really want to deal with. But we should all know the basics, and we should know enough to recognize common myths when we run across them. Here are a few misconceptions that keep coming around.
- If someone dies without a will, the state gets everything. There are lots of reasons to write a will but worrying about the state snatching your family’s inheritance is not one of them. If you die without a valid will (the legal term for this is dying “intestate”), then state law kicks in. Generally, your spouse and children are first in line to inherit. The rules vary from state to state, however; in some states, a surviving spouse and minor children share the deceased parent’s assets. So, do assets ever go to the state? Yes, but only when no relatives can be found. Tip: Write your will! Even if the state won’t get your money, you still want to decide who does—so don’t leave that decision up to state law. Making a will is easy, and it doesn’t cost a lot.
- It takes years to probate an estate. Most estates don’t take years and years to resolve. Usually, the only delay is the period, mandated by state law, that gives creditors time to file claims. The length of the creditors’ claim window varies from state to state; it usually starts when notice of the probate proceeding is published in the local paper and runs from three or four months on the short end to a year on the long end.
- The cost of probate will eat up all of the estate assets. There are a lot of scary stories out there about how much probate costs. If you believe the worst of them, you might think that your family won’t get a thing once the lawyer fees and court costs are paid. Fortunately, that’s just not true. Many estates don’t even require probate proceedings. Tip: If you live in a state where attorneys can charge extra-high fees, make sure your executor knows that those fees aren’t mandatory. The executor should find a lawyer who will charge a reasonable flat fee or hourly rate.
- I don’t have to leave anything to my spouse. Some couples decide not to leave each other a significant amount of assets. Especially if each one owns some assets independently, they may agree that each will leave most assets to his or her children from a previous marriage, or to a charity. Many couples in second marriages, especially if they married later in life, are primarily concerned with providing for children from a previous relationship. Tip: If you and your spouse don’t want to leave property to each other in your wills, go to a lawyer and discuss your plans. You’ll want to sign waivers, giving up your right to take against the will.
- The oldest child is entitled to be the executor of the parent’s estate. Just because they are the oldest, doesn’t mean they carry any weight when it comes to serving as the executor (personal representative) of a deceased parent’s estate. If the deceased person named an executor in his or her will, the court will appoint that person unless there’s a very good reason not to. (Reasons include a felony conviction or a disability that makes it impossible to do the job.) If there isn’t a will or the person named as executor in the will cannot or does not want to serve, then the court will appoint someone.
At the credit union, we care about your financial future and from a financial perspective, wills are important because they put you in control and keep your possessions where you want them.
Until Next Time,