Did you know that if you die without a will, the laws of your state govern how your property is distributed? And did you also know that if you die without any heirs-at-law, the state itself may be the ultimate beneficiary? This may be avoided by creating a simple will.
In general, those who die "intestate" -- that is, without a will -- lose the ability to control the passing of their property to their heirs. Whether it stands alone or as part of an integrated estate plan, a will provides for the disposition of property not otherwise so provided. A will is a necessity in any estate plan.
Among other things, a will may:
- direct the disposition of property according to your desires;
- establish a trust to provide for minor beneficiaries long after your death;
- nominate guardians for minor children; and,
- provide for the "pour over" of assets into a previously established trust which were not already transferred to the trust.
Your will is effective only upon your death. As such, you can always amend or revoke your will during your lifetime in order to take into account changes in circumstance(s) or condition(s). Indeed, your will should be reviewed both periodically and at the happening of certain events such as:
- changes in family circumstances, i.e., births, deaths, marriages or divorces;
- your move from one state to another;
- changes in federal or state tax laws; or
- significant changes in assets or property values.
A will does not by itself provide the beneficiary with any income or estate tax benefits. Accordingly, more sophisticated estate planning may be necessary in certain instances (such as when your estate is valued above the federal and/or state estate tax exemption amount1). Nonetheless, creating your will may be the first step toward an integrated estate plan.