What Happens if You Die Without a Will?
“Every adult should have one.”
That’s the importance Ruth Driscoll, an advanced planning attorney at Northwestern Mutual, places on having a will. And the way she phrases her advice is deliberate: “Rather than warning people about the consequences of dying without a will, I advise them of the value of living with a will,” says Driscoll. “Living with a will provides peace of mind that the people you love will be taken care of according to your wishes.”
More importantly, for people with children, it ensures their kids will be taken care of according to their parents’ wishes. “It’s shocking to me that people will spend more time and money investigating and paying for the right summer camp for a child than putting together a plan that can impact that child’s well-being for the rest of his or her life,” Driscoll explains.
So why don’t people do it? Surprisingly, the list of top explanations for putting it off does not include avoiding thoughts about our own mortality. According to Driscoll, more common reasons are that it costs money, offers no immediate gratification, takes time and requires answering hard questions (for example, what if your child dies before you?).
Others who delay feel that if they’re not millionaires, they don’t have the assets to warrant a will; or they just assume that the transfer of assets will go smoothly (with no family fighting).
Do any of these motives describe you? If so, Driscoll says, it’s time to push past the apprehension and make your will a priority; otherwise …
- A judge will name your children’s guardian. A judge might choose a local relative, so the children can stay in their current community, or someone who shares your religious beliefs—neither of which might be important to you. Some judges favor intact couples versus single parents—but what if your favorite sister is unmarried? Judges focus on what they believe is in the best interests of the child; they can’t guess your wishes and may not have the same perspective as you.
- A judge will decide who manages your children’s assets. Ideally, you’ve planned for your children’s financial security through life insurance and you’ve named them as beneficiaries (meaning they will get the money if you die)—but if they’re under 18, a judge will name someone to manage the money for them. And a potentially more concerning scenario is that once they’re 18, they’ll get all the money in a lump sum and will be able to do whatever they want with it. Carefully drafted estate planning documents can protect the money in a trust until the children are more mature and better able to handle this inheritance.
- Distribution of your assets might not go as you planned. Don’t assume the law will allocate your assets the way you would. Driscoll offers an example: “I have a family member who is 62 and married for the first time three years ago. Until that time and without a will, his assets would have gone to his living parents instead of nieces, nephews, siblings, friends or favorite charitable causes. For most people, leaving money to elderly parents is not their preferred choice.”
- Disputes could arise among loved ones. Driscoll has seen a number of cases in which children sued each other in the absence of a clear estate plan. “The intervention of a probate court to settle arguments is expensive and emotionally exhausting. When there is a death, money and emotion can be a combustible combination.”
Having watched stories like these firsthand is why Driscoll is so passionate when she tells individuals that they need a will. As you begin to draw yours up, Driscoll recommends the following:
1. Avoid vagueness. An effectively crafted will can provide peace of mind to you and your loved ones. If you’re vague, however, confused and hurt family members may argue over what they believe you intended. That’s one reason Driscoll recommends using an attorney. “It’s not that pre-made forms are inherently problematic,” she says. “It’s just that legal language has specific meanings, and people vary in their understanding of it. It’s best to go with a pro.” Driscoll mentioned one client who had used an online will. The will left everything to her spouse, then outright to the children of the marriage. However, Driscoll knew that her client had two children from a previous marriage. Those two children would have been disinherited under the form document the client brought in to be reviewed.
2. Don’t wait because you’re not sure about the right guardian. Make the best choice for this point in time and get it on paper. Naming someone is better than naming no one. These documents can always be changed or revised, and making a good choice based on your priorities is better than waiting for the perfect choice.
3. Remember that beneficiary designations always trump a will. A will governs only those assets for which there isn’t a clearly named recipient. Bank accounts that say “pay on death” and life insurance policies and retirement accounts that name beneficiaries will be honored over and above what you say in your will. Preparing your will is an important step in this process. Reviewing your beneficiary designations is equally important in creating a thorough and well-coordinated estate plan.
4. Review your will every five years. Things change as you live your life, and your will should be periodically reviewed and revised to reflect those life changes. “Your will is a road map,” Driscoll emphasizes. “Even with a valid will, the probate court is involved (as the will needs to be admitted to probate), and then the road map gets followed in distributing your assets according to the will. It’s realistic to expect that even with a will, it will take six months or more to get through the process. But make no mistake: Having this road map will facilitate the process. Dying without a will could prolong matters for months and even years and make an already difficult time even more painful.”