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A Will is a legal document which allows you to determine who receives your assets, and when, or in what manner the beneficiaries may receive their share. A Will also permits you to chose fiduciaries such as Executors (who will manage the estate), Trustees (who will manage trust under your Will) and, in the event there are minor children, who shall serve as their Guardian. Without a Will the State will determine who receives your assets based on State law (the laws of intestacy). In addition, without a Will the Surrogate’s Court, based on the law, will appoint the Guardian of your minor children and the Administrator of your estate.
The Need for a Last Will and Testament
So-called intestacy laws vary considerably from state to state. Many people have the mistaken notion that if they die without a Will their spouse will always inherit the entire estate. In many states the surviving spouse will inherit the entire estate only if no descendant or parents of the decedent survives the decedent; or all of the decedents surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decedent.
In general, though, if you die and leave a spouse and kids, your assets will be split between your surviving mate and children. If you're single with no children, then the state is likely to decide who among your blood relatives will inherit your estate.
Making a will is especially important for people with young children, because wills are the best way to transfer guardianship of minors.
You may amend your will at any time. In fact, it's a good idea to review it periodically and especially when your marital status changes. At the same time, review your beneficiary designations for your 401(k), IRA, pension, and life insurance policy since those accounts will be transferred automatically to your named beneficiaries when you die.
Tax Planning
Some estates are subject to Federal and possibly State estate taxes. In addition, beneficiaries inheriting from those estates may be subject to inheritance tax. A properly drafted Will with included trust may help to reduce tax liabilities. Tax law are complex and ever changing therefore it is recommended your estate plan be prepared by experienced counsel.
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