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Thinking about end-of-life planning is not fun. The subject can seem morbid and terrifying, and most people do not want to think about death. According to a recent Gallup poll, 56% of Americans do not have a will. The main reason why most people do not have a will is that they are too busy and haven’t gotten around to it yet. It’s hard to think about death when you are busy living life: working, shuttling the kids to after school activities, enjoying time with family and friends.
What happens if you do not have a will?
If you don’t make some decisions, then the intestacy laws in Connecticut and probate court will do it for you. And it might not be what you would have wanted. For instance, if you die and are survived by your spouse and children, your spouse takes the first $100,000 of your estate plus half the remainder of your estate. Your children will take the other half of the remainder. You might be surprised to discover that almost half your property may pass to your children after your death under Connecticut intestacy laws.
Moreover, a minor child’s share of your estate will be subject to probate court jurisdiction until he or she reaches 18 years old. A minor child will have to have an accounting of the estate regularly filed with the court, and spending money might have to be approved by the court. If, however, you are survived by a spouse and parents, and have no children, your spouse takes the first $100,000 plus ¾ of the remainder of your estate. Your parents take the other ¼. Also, if you are not married, but have a long term partner, he or she could receive nothing. The intestacy laws do not always cause problematic situations, but you may have a different plan in mind.
End-of-life planning can help ensure the care you want for your children.
Estate planning is obviously not just deciding who gets your assets. If you have young children, one of the hardest and most uncomfortable decisions to make is who will take care of your children should you and your spouse die. If you and your spouse do not have a plan in place, you are leaving it up to the court to figure out who will be your child’s guardian. This alone is reason enough to consider drafting your estate documents. You can choose a guardian and set aside money to ensure your child’s care, support and education.
What is not covered by a will?
There are some assets that do not pass under a will, such as life insurance proceeds, retirement savings or jointly held property. Those assets will pass on to the designated beneficiaries or the surviving owner of the jointly held property. After years of saving for retirement, what ultimately happens to your retirement savings can hinge upon what you wrote down when you started a job years earlier as you were filling out a form designating your beneficiaries. Therefore it is important your beneficiary designations are accurate and up to date. If all your assets are jointly owned in survivorship and all your insurance proceeds and retirement savings go to your spouse, a will may not be needed if your spouse survives you. But it will be needed if you both have passed away.
Stay on top of changes.
Be sure to update your will whenever your life situation changes, as you may want to change beneficiaries. This can include if you divorce, get married, have a child or new grandchild, have a family member die, have an increase in the value of your assets, or if there is a change in circumstances for your child, such as reaching 18 years old, marriage, divorce or disability.
You never know what the future holds, but you can make sure things happen the way you want them to before it’s too late. Whether you are married or single, have children or have no children, are a millionaire or have a modest income, you need a will. Do not make the mistake of letting a busy life get in the way of putting estate planning on the top of your list. It will bring you peace of mind and preserve your wishes and goals.
