A Will is the formal legal document setting out who receives your property at your death and who should oversee the process of gathering, inventorying and distributing your assets. Who needs a Will? In short, most people.
For many the key motivation to creating a Will is to set out who should inherit their property. If an individual dies without a Will, his or her estate is distributed according to a set of laws known as the intestacy statutes. In a way, these laws make up the government’s best guess as to how an individual would have liked their probate estate to be distributed based on his or her family situation. For example, the Wisconsin intestacy statutes provide that if a married man with no children died without a Will, all of his property would pass to his spouse. Similarly, the property of an unmarried woman with three children would be divided equally between her children. Having a Will to direct the distribution of property is especially essential for those for whom intestacy makes the wrong guess. So, who needs a Will?
Single Adults without Children. With no surviving spouse or domestic partner and no children or descendants, the Wisconsin intestacy statutes say an individual’s estate would be distributed to his or her parents if they are living. This distribution would be one half to each parent. If there are no living parents, the assets would be divided between an individual’s siblings. If no siblings, then to the grandparents; if no grandparents, then to aunts and uncles and on and on until a class of living relatives is found to inherit the assets. Not only can it be costly to identify who the closest relatives are, for many this will not be the desired distribution.
Unmarried Adults without Children. The intestacy laws make no account for the increase in committed non-married relationships, unless the couple is married or are registered domestic partners. If an individual in such a relationship dies without a Will, the survivor is not entitled to share in the probate assets in any way.
Blended Families. Wisconsin’s intestacy laws are quite complicated for blended families. In essence, the law provides that if a married individual dies without a Will and with children from a previous relationship, that individual’s estate is divided one half to the surviving spouse and one half is further divided among the surviving biological or adopted children. Based on the length of the marriage and the age of the children in some situations this formula may award too much to the surviving spouse and in others too little. A Will allows for a more thoughtful and situation-specific allocation between children and surviving spouse.
Those with Informally Adopted Children. Children who have been raised as if they are a member of the family, but have not been legally adopted are not accounted for in the intestacy laws. Grandparents of un-adopted stepchildren should also be particularly cautious to include them in a Will.
Those with Specific Assets. For those in first marriage situations, it may seem like the intestacy laws make the right assumption. Indeed, many couples create Wills leaving all of their property to each other. But, under the intestacy laws this gift is absolute. Even if couples want to leave 99% percent of their assets to one another, there likely are some assets that they would direct elsewhere. For example, the surviving spouse may not be the person the deceased spouse would have chosen to receive grandma’s jewelry or a father’s gun collection. Additionally, intestacy does not account for items of sentimental value that a particular friend or colleague may enjoy. Estate planning allows an individual to think about and documents his or her wishes for these types of items. This is especially important for valuable items, because a surviving spouse may incur gift tax liability for gifting an item to the intended recipient as the intestacy laws provide that the surviving spouse receives all the property. There is no gift tax associated with leaving an item to an individual in a Will.
Anyone with Minor Children Needs a Will. Setting aside the intestacy rules, a Will is the only place that parents can nominate a guardian for their minor children in the event that both parents have died. Also, unless a Will or Trust further restricts the assets, children who inherit through intestacy have full control of what they inherit when they turn twenty-one. This may be before they are able to be trusted to wisely invest the assets. For these reasons a Will is essential for parents of young children.
If you have questions about how intestacy laws would govern your particular situation, or about how a Will or a Trust could better fit your needs, please contact a member of the Stafford Rosenbaum Trust and Estates team.