Why Do I Need a Will
There are a lot of misconceptions surrounding wills. Because wills are linked with death a lot of people don’t want to think about the subject and when they do they seem to get their information from movies and sitcoms. Below, I have cataloged some questions I often hear.
Why Do I Need a Will if I Don’t Have Much Money?
You don’t have a large estate now but will that be the case in 1 year? 5 years? Even a small amount of savings can be a windfall for your loved ones or a favorite charity. You also never know what the circumstances of your death might be. If a person dies as a result of another person’s negligence even the poorest person’s estate could be worth hundreds of thousands of dollars.
Why Do I Need a Will When I Don’t Have a Spouse or Children?
If you die intestate (without a will) your estate will pass by the laws of intestate succession. If you have no wife or kids that means your parents will get your estate’s property. If your parents are dead your siblings, nieces or nephews, or even aunts, uncles, and cousins will share your estate.
If you have absolutely no family, your estate will go into the treasury of the state. Some people are comfortable with that, others would rather give some money to friends, significant others, or charities. With a will you decide who gets your money. Without a will state law and probate court decides.
Why Do I Need a Will, Won’t My Spouse Automatically Get My Property?
That is not necessarily the case, even in a community property state. While your spouse would inherit all of your community property, half of your separate property â€“ property that you obtained before marriage or through inheritance â€“ would pass by the rules of intestate succession. All of a sudden your spouse could be sharing a significant amount of your estate’s property with your parents or children.
Also, there is the possibility that you and your spouse could die in a common disaster. Then all of your property is being passed by the laws of intestate succession. And if your spouse dies shortly after you, most of your property is being distributed to your spouse’s family.
Why Do I Need a Will When I Have Told the People I Would Like to Take Care of My Kids if I Should Die?
If I had my way, a child would not be able to leave the hospital until his parents had their wills done. Having a child and not having an executed will is irresponsible. A will allows you to nominate a guardian for your children. A judge who does not know you or your family will have to choose a guardian for your children and a trustee for their inheritance.
Additionally, you can set up a trust for your children’s inheritance so you can be sure their education is provided for before the money is turned over to them. An 18 year-old being handed a chunk of money generally does not turn out well, but that is what will happen unless you arrange for something else to occur in your will.
What is a Community Property Agreement?
A community property agreement is a tool that takes advantage of Texas’s community property laws to allow a surviving spouse to avoid the process of probate after the death of the other spouse.
A community property agreement is appropriate to use if the spouses agree that if one spouse dies, they both want all of their property to transfer to the surviving spouse. Each spouse is entitled to direct where all of their separate property (property acquired before marriage and certain other property such as inheritances) and one-half of their community property (property acquired during marriage) in a will.
However, if a community property agreement is in place and one spouse survives the other, the will is bypassed and all property is automatically transferred to the surviving spouse without court intervention. A community property agreement will let the surviving spouse take over bank accounts, vehicle titles, deeds to real estate,
A community property agreement is only appropriate if the spouses agree that all of the couple’s assets should go to the surviving spouse upon the death of the first spouse. Therefore a community property agreement would not be appropriate if it is important to either spouse that their children, especially if the children are from a prior marriage, or a charity receive some portion of their estate. A community property agreement has no tax advantages, so it is not an appropriate tool to use for estates that exceed two million dollars in assets.
Even though a community property agreement accounts for a transfer of property of one spouse to the other, a community property agreement should be prepared in addition to each spouse’s will. If both spouses die in a common disaster such as a bad car accident, a will for each spouse has to be in place to determine where the property will go since there will be no spouse to receive the property.
Another reason a will is still be required is that if a spouse dies insolvent (with more liabilities than assets), which can happen after a long illness or even after a short hospital stay, the estate may still need to be probated to protect the surviving spouse. Also, a community property agreement generally automatically expires if a petition for divorce is filed by either spouse so a will should be in place just in case.
It is important that a durable power of attorney is in place when a community property agreement is in place. It could be advantageous for the marital community to cancel a community property agreement should one spouse become disabled. The only way a disabled spouse can cancel an agreement is through an â€œattorney-in-factâ€ named in a durable power of attorney.
Lawyer at Engel Law Firm can help you decide if a community property agreement is appropriate for your situation and if it is, we can help you prepare and execute the document.