If you haven’t written a will yet, you are in good company. Many famous writers, musicians, and artists—such as Stieg Larsson, Bob Marley, and Pablo Picasso—died without leaving instructions about who should get their assets and take care of their children. An estimated two-thirds of American adults do not have a will.
Even those who really should know better have died intestate (without a will), including eccentric billionaire Howard Hughes and President Abraham Lincoln.
Even if you’re young and healthy, you should take steps to protect your family from the mess that can result from failing to plan for the possibility that you will die or become disabled earlier than expected. If you die unexpectedly without a will, your family is not likely to be able to get a Supreme Court Justice to intervene to ensure quick action, as Lincoln’s family did.
Other basic legal documents can ensure that your property is managed as you wish during your lifetime, if you become unable to manage it yourself; and that decisions about your own healthcare are made by the person(s) you choose in accordance with your own desires, if you become unable to decide for yourself.
Taking care to create the basic legal documents in the Display below will spare you family from having to deal with a wide range of potential problems during a crisis, reduce the potential for family conflict, and preserve their privacy—and yours.
Note that even if you have a will, the administration and distribution of your assets will be subject to the probate process, a state court proceeding that is open to the public. The potential expense, delay, and loss of privacy that the probate process entails makes minimizing assets subject to probate desirable for many people.
Generally speaking, assets titled in your name at death are subject to the probate process. Assets not subject to probate include assets with designated beneficiaries, such as IRAs, pensions, life insurance policies, or annuities; property held in joint tenancy that passes by law to the other tenant; and assets held in trust at the time of death.
One common way to minimize property subject to probate and to avoid court guardianship if you become incapacitated is to establish and fund a revocable living trust during your lifetime. As its name implies, you can revoke or amend a revocable living trust at any time. You may act as the sole trustee with exclusive authority to manage the trust assets andn designate a successor trustee. This type of trust confers no tax benefits and does not protect your assets from creditors.
In practice, however, it can be difficult to put all one’s assets into a revocable living trust; most people with these trusts also have a basic will to dispose of some assets held in their own name.
The views expressed herein do not constitute, and should not be considered to be, legal or tax advice. The tax rules are complicated, and their impact on a particular individual may differ depending on the individual’s specific circumstances. Please consult with your legal or tax advisor regarding your specific situation.