I received a phone call a couple of months ago from a lady whose husband had recently passed away. She explained to me that her husband had several pieces of real estate in his name but that they were not in her name. She wanted to know how to get them into her name.
And so began a very unpleasant conversation. What came next were a series of questions about whether he had a Will (he did not), whether there were any minor children (there were not), whether they had children together (they did not) and whether he had children from a prior marriage (bingo! He did). She was not very happy when I explained to her that, because he died without a Will, his assets would be split 50% to the surviving spouse and 50% to his adult children from the prior marriage.
Why You Need A Will – Even if you don’t have much…..
Believe it or not, I had three phone calls very similar to this in one month! Many people think they do not have much to plan for, so why bother doing a Will or any other estate planning? Well, as this example illustrates, planning is especially important where there is a second marriage involved. If the widow above had also been the mother of the adult children of her husband, she would have received a 100% interest in the estate assets, rather than a 50% interest. However, because her husband failed to plan (either by titling her jointly on the real estate, or having a Will that left all his assets to his surviving spouse) she lost out on 50% of his estate.
If you do not take matters into your own hands by doing estate planning, the state of Florida will do it for you via the probate laws that govern what happens when you die without a Will (otherwise known as “intestate”). What’s that? You don’t have the money to go to an estate planning attorney to have your documents prepared? Well, then, here are some things you can do to avoid probate, on your own:
- Title assets jointly (i.e., bank accounts can be in two names);
- Make sure there are beneficiary designations on life insurance, retirement accounts and other investments (if you have a beneficiary named on the account, at your death, the beneficiary produces a death certificate, fills out some forms, and receives their share of the asset);
- If you do not want to have someone joint on your bank account (because you do not want them to have access to your account or for some other reason), make sure you list them as a “Payable on Death” beneficiary – you have to specifically ask the bank to do this (they do not automatically ask you when you set up an account).
Keep in mind, however, that it is still a good idea to have a Will if you have unusual circumstances, or you have someone you want to disinherit (that could inherit under Florida law if you don’t have a Will), or a myriad of other reasons. It’s an even better idea to have a durable power of attorney and a living will and health care surrogate designation because chances are, you will have some incapacity hit you before you leave this world – but, that’s a blog post for another day!