Yes, you read that title right. The late Elmer Fudd would be proud. While Elmer would certainly urge your silence, I would offer that your voice should not go unheard!
So, how do you ensure your voice is heard? One very straight forward way is to execute a Last Will and Testament.
A Last Will and Testament is a legal document that communicates a person’s final wishes. A person can direct how their real and personal property is to be distributed in the event of their untimely demise. For those of us with minor children, a Will is also a place where you can name another person (or people) to act as guardian in the event that both parents pass away before the children reach the age of majority.
Well, what happens if I don’t make a Will? Great question and I’m glad you asked. In the event that a person passes away without a Will, otherwise known as dying “intestate,” that person’s property will be distributed in accordance with the laws of intestate succession. These are a set of laws, established by the State Legislature, that act as a default set of rules in the absence of a Will. Both real and personal property will be distributed in accordance with the relevant statutes that fit the factual circumstances surrounding the decedent’s estate.
I have always learned best by example. Let’s take a closer look at a common situation where the absence of a will has a significant effect on property interests.
Betty and Margaret are two lifelong friends. Betty is married with two adult children. Margaret is widowed and has five adult children. Betty and Margaret are co-owners, each with a 50% ownership interest as tenants in common, of a small piece of real estate that they bought together. Margaret dies suddenly without a will, leaving only her five adult children behind. What happens to that small piece of real estate that Betty and Margaret bought together?
In short, Betty’s interest remains unaffected. She retains the same 50% interest in the property that she had prior to Margaret’s death. However, Margaret’s interest, in the absence of a Will, is distributed to her heirs at law. In this case, Margaret’s 50% property interest would be divided evenly between her five adult children. In other words, each adult child would acquire a 1/5 interest of Margaret’s original 50% interest, in the real property as tenants in common. As a result, there would now be six co-owners of the small piece of real estate originally purchased by Betty and Margaret.
Was this the intended outcome? Now that there are considerably more owners, what happens if there is a disagreement between the co-owners on what to do with the property? What if one of the five adult children want to sell the lot or build a house on the property contrary to everyone else’s position? What if one or more of the adult children predeceased Margaret? Furthermore, if one or more of Margaret’s children predecease her, how did their respective estate plans direct their assets, if at all? If Betty files for divorce from her husband, would her interest be subject to equitable distribution? Who is responsible for paying annual taxes, necessary upkeep, and maintenance? How easy is it to identify the current owners?
There are countless “what-if” scenarios that could apply and it is easy to see how easily things can spiral out of control. Ultimately, the question remains: Could this all have been avoided?
The answer is YES. If Margaret had executed a valid Last Will and Testament during her lifetime, she could have directed the property to pass according to her wishes. For instance, she could have directed her ownership to a single person of her choosing. Alternatively, she could have granted Betty what is called a “right of first refusal,” giving Betty a choice on whether to buy out Margaret’s interest upon her death. There are a multitude of ways that Margaret could have simplified the process. Nevertheless, absent a valid Will, distribution of Margaret’s property interest was out of her control.
The following are some other common scenarios that can prove to be problematic when someone passes away without a Will:
- The decedent was separated from a spouse but not divorced
- There is an illegitimate child of a deceased father
- The decedent owned an interest in a functioning business with another non-family member
- Assets going to a special-needs individual
- Situations involving minor children
Let us help you avoid leaving a tangled web. The professionals at McIntyre Elder Law can assist not only with drafting a Last Will and Testament but with all your estate planning needs. Call us at 704-749-9244 or visit us at mcelderlaw.com and book your free consult today!
Estate Planning & Elder Law Attorney