Undesirable Consequences of Failing to Draft a Will

Undesirable Consequences of Failing to Draft a WillWhile a living trust provides a preferable estate planning option for most people, a will is still a critical component of an effective estate plan. When a will is not included as part of an estate plan, it can cause serious problems for your loved ones after you die. Even with the use of an effectively drafted living trust, a will typically is an appropriate estate planning tool to cover property that an individual fails to transfer into the trust. Our Albuquerque Estate Planning Lawyers have provided examples of the types of problems that may arise when people neglect to make a will.

Kids May Receive Assets before Their Ready:

When an individual dies intestate and minor children are awarded property through a will, the property will be held in a court imposed guardianship until the child is an adult. When the child becomes a legal adult, the surviving child will receive the property in a lump sum distribution. If the beneficiary is not yet responsible or mature enough to properly manage the inheritance, the value of the property may be prematurely squandered. An individual can appoint a trustee to manage the assets for the beneficiaries so that the funds remain available for necessary expenditures rather than being wasted on inappropriate expenditures.

Assets May Go to the Wrong Individuals:

While the court will distribute the net assets to the beneficiaries designated in a will, the court will distribute assets according to intestate succession law when there is no will which creates a statutory priority for inheritance rather than distributing the property in conformity with the preferences of a decedent.

Estate Tax Liability May Fall on the Wrong Parties:

Because some assets are passed based on a beneficiary designation rather than through probate, the lack of a will means that assets may pass through intestate succession to a family member that inherited a retirement plan as the designated beneficiary. The estate taxes will be paid in probate court, so the wrong beneficiaries may end up responsible for paying estate taxes.

The Wrong Person May Administer the Estate:

If you designated someone in your will to administer your estate, the court will typically honor this selection. If no will exists, the court will follow preferences established by state law but many relatives may be considered. This means that the cost of selection as well as the fees charged by the personal representative will tend to be higher. Further, the person who ultimately manages administration of your estate may not be the individual you would have chosen.

Balancing Securing Financial Information with Access by Beneficiaries

The above information is designed solely to illustrate general principles of law, and does not constitute a specific legal opinion on individual cases. We suggest that you contact experienced legal counsel for a specific opinion tailored to your individual circumstances.

If you have questions about will administration, our Santa Fe, NM Estate Planning Attorneys at Life Leaf Legal Group, PC offer a free consultation in our centrally located offices in Santa Fe and Albuquerque so that we can discuss your specific situation. Call us today to schedule your free consultation at (505) 856-3591 to learn about your rights and options.

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