1. Intestacy.
If you die without a Will (also called dying “intestate,”) North Carolina law has default rules which govern the transfer of your assets at your death. These default rules may not produce the result you would choose. Did you know that if you die without a Will, survived by a spouse and at least one of your parents, and not survived by any children, that your spouse will split your probate assets with your parents? These default rules are set out in the North Carolina General Statutes, and spell out who inherits at your death and in what percentages. A validly executed Will trumps these default rules with respect to probate assets.
(*Validly executed beneficiary designations on your life insurance policies and retirement plans, and assets titled jointly with right of survivorship, will not be subject to the intestacy rules.)
2. Minor Children.
If you have minor children, a Will is the place to designate a person to serve as guardian of your children in the event of your death. In addition, you can establish a trust for minor children in either your Will (called a testamentary trust) or in a separate trust document (often called a Revocable Trust, or sometimes a “Living Trust.”) This allows assets to be held for a child’s benefit until whatever age you designate. Otherwise, assets will be held by a court-appointed guardian under fairly restrictive terms and will be distributed outright at age 18.
3. Got Bond?
In a Will, you can waive bond for your Executor. The Executor is the person who finds and transfers your assets after your death. If you die without a Will, this person is called an Administrator, and this person most likely will have to post bond in order to serve.
4. Loose Ends.
Although you may have beneficiary designations on your retirement plans and insurance policies, and your other significant assets might be titled jointly with your spouse or partner, there may be straggler assets such as your car or a savings bond titled in your sole name which will require an estate administration to pass title. It is quite possible your heirs will spend more to administer these “loose end” assets than these assets are worth.
5. Family Feud.
When you die without a Will and your assets pass by the default rules of intestacy, your heirs will have to share assets. In the case of your home or other real property, this means the heirs share ownership as “tenants in common,” and must agree on all decisions related to the sale or transfer of the home. If family members don’t get along, or have different opinions about the desired outcome, litigation among family members may result.
For these and many other reasons, a validly executed Will can solve a number of problems otherwise created when someone dies intestate. If you would like to create a new Will, or review an existing Will, we can help.