When do I need a Will?

If you are asked if you have a Last Will and Testament, what do you say? Do you give a proud and resounding yes? Or do you provide a reason you don’t have one or don’t need one?

A Last Will and Testament is to provide gifts and instructions for your loved ones. I hear people say “I don’t care what they do.” or “They will work it all out.” These care-free, everything will be fine feelings about the distribution of your personal and financial assets provide you peace of mind, but those who survive you, will have much more difficult feelings. Your survivors can fairly distribute personal belongings, but they would rather know your wishes. And when your wishes are in writing, then it eliminates uncertainty.

You need a Will if you have personal property you wish to gift

For example, a parent may tell a child, “I want you to have my car after I die”. If the gift is written into the Will, then there is no question as to what is supposed to happen to the car. If there is not a Will, the promise made by the parent is not enforceable and will cause rumblings among the other children. The child that was promised the car is hurt when the siblings require him to purchase the car from the estate and will always think of this bad situation when he uses the car. A car that is valued at a few thousand dollars can create tension among the children for years after the situation is resolved.

This same situation can occur with a personal item that has no market value but has a high sentimental value. For example, a grandmother may tell her granddaughter, “I want you to have my sewing machine after I die.” Again, if the gift isn’t in a Will, then the promise is not enforceable. A child or sister may have fond memories of using the sewing machine and a disagreement about new ownership of the sewing machine ensues. If there is not a Will, then it passes to the surviving spouse. If there is not a surviving spouse, then it passes to the children of the decedent. If there is more than one child, they have to agree to what happens to it. Due to its age, the sewing machine likely has little market value, therefore, the option of the granddaughter to purchase it is not a viable solution.

There is an entire workbook on this situation called “Who Gets Grandma’s Yellow Pie Plate” published by the University of Minnesota Extension . A quick internet search turns up supplemental resources, like the publication called “Who Get Grandma’s Yellow Pie Plate? Transferring Non-Titled Property” by the Montana State University Extension. The transfer of personal belongings is a real issue that families have to deal with after losing a loved one. Save them from this emotional strife and include specific gifts in your Will.

You need a Will to save time and money

In a Will, you can waive the requirement of your executor to post a bond. Not every estate can escape the probate process, even if there is a Will. For more information visit this page “When is probate necessary in Iowa?” If the estate requires a court-supervised transfer of assets (see potential list of assets that trigger probate), then a case has to be open in the probate court of the county where the decedent lived. A bond is calculated based on the gross value of the estate and is required to protect the interest of beneficiaries and creditors. Unfortunately, not every executor handles the money the way the law requires and the bond is an insurance policy to protect the assets of the estate. Bond is paid from the assets of the estate, which lowers the amount distributed to the heirs. It also takes approximately three weeks for the administrator/executor to obtain a bond. The timeline for when an estate can close and the proceeds distributed is delayed when a bond is required. A bond can be waived in a single sentence in a Last Will and Testament and save your estate time and money. A bond is likely more expensive than having an attorney draft your Last Will and Testament.

You need a Will to name a guardian for your child

Tragic events happen and it is possible that a parent may die before their child. If the child is under age 18 (a minor), then a person has to apply to the court to be appointed as the child’s legal guardian. If you have named a person in your Will to be appointed as guardian, the law in Iowa gives preference to the person appointed in your Will. If you do not appoint a guardian in your Will, you are placing your child in an emotionally difficult and unstable situation. It puts the rest of your survivors in an impossible situation because it is likely that more than one person from a different household will ask the court to be appointed as the guardian. This situation happens when the grandparent from each side of the family wants to be appointed the guardian. This is a situation you can easily prevent by naming a guardian in a Last Will and Testament. Your children are already grieving the loss of a parent, don’t add the burden of a contested court case on their hearts.

You need a Will to create a testamentary trust for your child

A minor cannot receive an inheritance until they are 18-years old. Until then the funds, if they exceed $50,000, have to be held and managed by a court-appointed conservator. There are expensive court costs associated with this process and the conservator is eligible to receive compensation. A conservator typically hires an attorney to advise on the legal requirements of the conservatorship. The attorney for the conservator is also entitled to compensation. Compensation is paid from the assets of the conservatorship. You likely do not want your child to receive his or her full inheritance at age eighteen; the way to prevent this is to create a testamentary trust. A testamentary trust is written in your Will and created after you pass away. You state in the trust at what age the child will receive his or her inheritance and until then, the trustee, that you appoint, manages the funds for the child’s health, education, and general welfare.

You need a Will to provide gifts to charity

By nature, we feel charitable when we discuss our asset distribution after death. There is no question that we cannot take money or belongings with us after we die. A charitable intent is only valid if it is put in your Will. If you tell your spouse that you want some of your money to go to the Animal Rescue League, it may not happen unless you put it in writing in your Will. If the gift is not in your Will, a spouse may be concerned about cost of living and past medical bills so they may hold on to all of the assets. Or you may be single and tell a person who helps you with your lawn care that you intend to leave money to them after you die. The promise of a gift is not enforceable if it isn’t in writing in your Will.

There are many more reasons why to have a Will and many are covered in my FAQs for Wills.

Please contact me with any questions.

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