Your will is critical! Here’s why …

Summary

• You ought to have a will in place, and should review/update your will periodically
   
• When you die your accumulated belongings (your estate) are inherited by your heirs/beneficiaries: some assets transfer by contract/titling laws and the remainder of assets transfer through the probate court
   
• Don’t put off getting your will executed. Further, don’t die “intestate”. It only opens the door to complications later that can mostly be avoided by having a valid will
   
• Basic estate planning involves minimizing potential probate costs by executing a will and naming beneficiaries to all pertinent financial accounts where allowable. More advanced estate planning may involve understanding/planning how your physical assets (real estate, cars, motorcycles, etc.) are titled/transferred after your death, among other greater considerations
   
• If you have (a) pet(s), use your will to assure their safekeeping in the days beyond when you are no longer around to take care of their needs

Your Last Will and Testament is one of the most basic financial and estate documents you will need to complete to build your wealth plan. Clients of Lakeland Investor Services, Inc. need to consider the importance of their will as a critical part of their wealth planning initiative. It’s very easy to overlook the importance of your will, and doing so can end up leaving your surviving family some very troubling financial matters, and far worse, emotional conflicts in their future days ahead. Why is your will such a critical document? To answer this question, consider what your will accomplishes. 

When you die, accumulated belongings from your lifetime (your home, cars, invested assets, furniture, treasured collections, etc.) are accounted for and passed along to others, presumably in your good stead. Your will determines to whom your accumulated belongings are intended to pass. But before all these belongings you’ve left behind can be received by others an estate must be created in your name as a matter of law. This “matter of law” exists regardless of whether you are single, married, or divorced! Your community’s probate court supervises the administration of your estate to oversee that your accumulated belongings are properly received by those whom you intend to receive them, but only after debts you may owe and have left behind can be properly settled. Additionally, the general public is notified in the event that others might wish to lay claim to any of your accumulated belongings. So your will becomes the essential legal document in which the probate court uses to determine your wishes for disposition of your accumulated belongings are administered according to your actual intentions. Dying without having a will (dying “intestate”) doesn’t preclude your most intended heirs from receiving your accumulated belongings. It just makes the process potentially messier and could leave some of those belongings up for grabs in contrast to your (unrecorded) wishes. Most state laws of Intestate Succession are designed to minimally protect and provide for the surviving spouse and children of the decedent. But some states laws may also provide an inheritance for the decedent’s parents, siblings, aunts, uncles, and even their children/grandchildren. So ask yourself who you want to benefit from receiving the accumulated belongings you’ve built over your lifetime, and then make sure your executed will stipulates those intentions.

Don’t die intestate!

Lakeland’s clients simply should take measures to have a will prepared. Whether you are young and single, just starting out in marriage, approaching retirement, or already receiving the benefits of Social Security, you need to have a will. Further, your will should be reviewed and updated periodically, especially when life’s normal and routine changes come upon you --- such as the birth of new children/grandchildren, your permanent relocation to a warmer, sunnier climate, a divorce within the family that causes a potential rift in future wealth transfer considerations, etc. You simply do not want to die “intestate” (not having executed a will). The potential for problems (legal, emotional, and otherwise) in the administration of your accumulated belongings becomes far more complex, at least a little lengthier in the amount of time it takes to administer your estate, and a good bit more expensive to your heirs as attorneys (and their often-exorbitant fees) come alongside the probate process to help settle the stickier matters of administering your estate. Worse than higher costs and wasted days of waiting, your heirs might find themselves fighting with one another over how and to whom you actually intended to pass along your treasured _______ (fill in your own “blank” here: china set, silverware, family heirlooms, gun collection, antiques, etc.).   

Don’t let life get in the way!

There are a myriad of excuses for not getting your will created, updated, or otherwise periodically reviewed by an attorney/financial advisor. Procrastination is probably the most common excuse for “will avoidance”. Some people just don’t consider their own mortality. They simply can’t foresee ever actually dying. Well, it happens! And your own “grim reaper” might right now be standing just behind your chair as you read this blog post (shivers!). Others fear the legal costs of having a will prepared; again, those pesky often-exorbitant attorney’s fees. Yet others avoid having their will prepared because life’s other complications have already created an atmosphere of avoidance. Example: maybe the present spouse of your now second marriage would become too sensitive (hurt) to find that you’d like your house (from your first marriage) to eventually pass along to the children from your first marriage? Can you see the emotional complication here? The avoidance of creating your will in this situation only causes worse problems down the road; problems you simply can avoid with straight up honesty and diligence today … and a thoughtful estate plan! There may be other reasons keeping you from getting your will completed today? Whatever those reasons, you need to consider the potential for complications you are allowing to manifest later in the lives of those you love the most by neglecting to have a will prepared today.   

Minimize your estate … Minimize the costs

Avoiding probate for the greater portion of your accumulated belongings helps to minimize court costs and can serve to get those assets into the possession of your intended heirs/beneficiaries more quickly. The significant portion of your accumulated financial belongings can be arranged to pass directly to your beneficiaries outside of the probate process. This could include your investments/retirement accounts, bank accounts, and certain life insurance policies, whereby the naming of beneficiaries or pay on/transfer on death (POD/TOD) account registrations can be arranged to pass those assets directly to your intended beneficiaries. Doing so removes those assets from your probate estate, thus reducing the costs and potential conflicts of having those assets administered through your will. Your real estate and other physical assets (cars, boats, motorcycles, etc.) which would otherwise transfer as a matter of how they are legally titled need to be carefully scrutinized to assure you understand how those assets are to be construed by the probate court, either as probated assets or non-probated assets. Your financial advisor/attorney can help you work through this exercise so you more clearly understand how those assets would pass to your intended heirs. It may be less costly ultimately to arrange for some of those assets to be placed inside a trust to remove them from your probate estate in order to reduce probate costs. There may be other compelling reasons beyond mere probate costs to have your real/physical property placed inside a trust, as well. Welcome to more advanced levels of estate planning!  

Don’t forget your pet(s)!

Have you considered the ramifications of dying intestate and not having a written plan for the courts to execute on behalf of your pet(s)? As a pet owner you are acutely aware of the costs and conflicts involved with maintaining the life and health of your other “children” … dogs, cats, maybe even that pet gopher you’ve kept comfortably content in a cage in your spare bedroom. Your will can provide the groundwork for assuring your pet(s) is/are cared for when you aren’t around any longer to be their “best friend”. Somebody has to step in and do that job and your pet(s) will already have had enough emotional suffrage having lost you from their daily existence. Yes, even your pets can benefit from you taking action today to have your will executed.

Mark W. Petro is a financial advisor and President of Lakeland Investor Services, Inc., a Registered Investment Advisor in Conneaut Lake, Pennsylvania.

Important Disclosure: The information contained in this article are the views, opinions, and/or strategy considerations of Mark W. Petro and Lakeland Investor Services, Inc. (LIS) and are presented for educational purposes only and should not be construed as specific investment, legal, tax, or accounting advice. For advice specific to your own circumstances, you should consult with a financial/tax advisor. Certain information contained in this article may be derived from third party sources and is deemed to be reliable, but its accuracy and completeness has not been verified and cannot be guaranteed. If links to third-party sources are present within this article, you hereby acknowledge that they are made available solely as references for your convenience and do not imply any affiliations, endorsements, or representations whatsoever by LIS and/or its advisor regarding third-party content. LIS is not responsible in any way for any content, availability, or privacy policies of any linked third-party sites, and shall not be responsible or liable for any information, opinions, advice, products, services or electronic intrusiveness presented on or through them.