Most people hear that they should create a Will or Trust. But, why? Why do you need to create a Will or Trust? Depending on your situation, you might not feel the need to and that’s ok. If you decide you don’t need to create a Will or Trust, you should at least understand what you are facing in order to make an informed decision.
Every person has a different family dynamic. That dynamic changes what will happen if you die without a Will or Trust, which is called Intestate Succession. The Idaho Code (our law) describes the Intestate Estate as any part of the estate of a decedent (deceased person) not effectively disposed of by his Will. Idaho Code 15-2-101.
In this post, we will cover a single person without children. What will happen to his estate, or his stuff when he passes away. But, Estate Planning also covers what will happen if you become incapacitated or incompetent, so we will cover that too.
First, if you do not have a spouse or children, then everything you own will be divided equally between your legal parents. Mom receives half and Dad receives half, even if Mom and Dad are remarried to other people. For some, that is a very clear cut understanding and that is what they would want to have happen. For many others, that is the last thing that they would want to have happen.
With intestate succession, the main idea to remember is that your wishes and wants are disregarded. They do not have a voice. So, you may know that Dad raised you and Mom was never around. Or, Mom raised you and you met Dad once or twice in your lifetime. Does not matter one bit, Mom receives half and Dad receives half.
Sometimes Mom or Dad die before you (predecease). What happens then? Since you have no spouse or children to give gifts to, your estate will go to Mom and Dad’s children evenly.
But, you were an only child, Mom cared for you and is now hurting financially, and Dad had three other children with three other women. Does not matter. Dad, who predeceased you, his other three children will evenly split one-half of your assets, while your Mom (who was your real caregiver, as Dad was never around) receives the other half.
Last scenario. Mom and Dad predecease you and they did not have any other children. Your assets are now split evenly between Mom’s parents and Dad’s parents. In this case, the chances are that most grandparents will predecease everyone previously mentioned. What happens then? Your assets will end up in the hands of your Aunts and Uncles, or their children.
If this is ok with you, maybe having a Will is not necessary. Just remember, your wishes and wants do not matter in Intestate Succession.
Still, what is the point of planning if Idaho already creates a plan for you? Answer, Idaho’s plan is limited. It only covers death and assets. There is more to planning than that.
A Will names a legal representative called a Personal Representative (PR) that is charged with administering your estate after you pass away. The PR is tasked with representing your estate in probate court, notifying your Creditors of your passing (which is actually a good thing for you), accounting for all of your assets, and distributing your assets at the close of probate. If your estate is Intestate, you have no PR. Anyone in the world can apply for this position. There are also PR fees and because of that, there are professional PRs that charge a hefty price for their services. That can be avoided by naming a PR in your Will.
Part of your Will package should include Powers of Attorney. These come into play if you become incapacitated or incompetent. They represent you in financial situations or health care situations. I don’t know about you, but I want someone I know and trust to make financial or medical decisions for me if I can’t. Imagine needing a Guardian because an accident or Alzheimer's left you unable to care for yourself. Would you want to choose who will care for you if you can’t do it yourself?
But, if you don’t plan and this becomes a need, again anyone can apply for the job. These people can then seek reimbursement from you for the court costs and attorney’s fees spent.
Everything we plan for, will eventually need to be addressed. The planning we do now serves three purposes; 1) limits those who can represent you to those people that you choose, 2) limits costs from reimbursement and fees paid out, and 3) limits time spent in court. This last one is a valuable consideration.
So, if you are comfortable with your assets being distributed as mentioned above, you are willing to roll the dice that nothing will ever put you in the situation of needing a power of attorney or a guardian, and you do not shy away from the extra costs involved, then you might not need to create a Will or Trust. Your call.
Schedule a conversation with Justin Jeppesen to take the first step towards creating your complete estate plan! With our Free Initial Consultation we help our clients explore their own situations and plan for their futures. If you have more questions, we'd love to help!
Contact Jeppesen Law now: (208) 477-1785.