People always ask whether someone needs to have a will. My answer is that it is always best to have a well thought out will drafted by professional implemented prior to one’s death. A will only covers assets that are titled in an individual’s name alone. If assets are held jointly, then the assets will pass to the survivor at the death of the first party. An asset may also designate someone to receive the assets at one’s death. Typically, a brokerage account will have a designation of beneficiary known as transfer on death [tod] whereas a bank account will usually be payable on death [pod] to a beneficiary. In either case, if no one is named as the recipient of the asset, it will pass pursuant to the terms of the decedent's will. Life insurance policies, annuities and retirement plans pass by beneficiary designation to the party named therein. If no one is named as the beneficiary, it may pass to the heirs named in the will. Having no designated beneficiary will create an adverse tax consequence for the recipient.
If a will has not been implemented or if a person is incapacitated and cannot sign the will, the assets will pass to the heirs of the person who has died by operation of law. Most states normally have a statute which delineates who is to inherit the assets if no will is in existence. These are known as intestacy statutes. For example, in Maryland if a person dies intestate, their spouse will split the probate estate equally with the grown children. This could conceivably be an unwanted result. In the event of a blended family or a recent marriage, the result may be disastrous since the spouse may get a larger share of the estate than intended. If minor children are involved, they may receive their inheritance in an intestate estate the age of either 18 or 21. Most people would not be excited to leave young family members a large portion of their estate at such an early age.
The good news is that most states will write a will for a person who dies intestate. The bad news is that is all may create a controversy or a family feud. Unintended family members may be the recipient of your largess. Unwanted individuals may petition the court to or a court appointed third party to administer your estate. It is always best to make your wishes known to a family lawyer who can help you craft a document that passes the assets of your probate estate and designates the oversight and administration of the estate to the appropriate parties.