What is procrastination?
It is defined as "putting off something
until a future time."
Why do some people procrastinate
when it comes to wills and trusts? Death
is not a pleasant subject to think about, and making a will or
trust is an admission of mortality.
What if someone procrastinates
about getting a will or trust, and then suddenly dies? There are several problems that may occur, including:
1. Higher estate taxes. The estate might have to pay estate taxes that could
have been avoided with an estate plan. As a result, heirs and
beneficiaries will receive substantially less from the estate.
For further details, click here: Federal estate
taxes
2. Probate. The estate might wind up in probate, which could
have been avoided. The estate may be stuck in probate for a long
time, and inheritances will be delayed. Probate fees are expensive,
and they could have been avoided with a living trust. Click here
for more information: Living Trusts
and Probate
3. Intestate succession.
When someone dies without a will in California,
the laws of intestate succession are used to determine who will
receive the assets of the estate. In general, the deceased person's
nearest relatives will inherit the assets. If that person wanted
some other person or charity to receive all or part of the estate,
those plans cannot be carried out. For a detailed discussion of
intestate succession, click here: Dying without
a will
4. The surviving spouse
may not inherit the entire estate. Many
people believe that if they die without a will or trust, their
spouse will inherit what they owned. This is true for community
property, but the surviving spouse will inherit only half or
one-third of the separate property of the other spouse in the
following circumstances if there is no will:
a. The spouse will receive
only half of the separate property of
the other spouse if the first spouse to die is survived by one
child, or the issue of one child, or by a parent, or the issue
of a parent.
b. The spouse will receive
only one-third of the separate property
of the other spouse if the first spouse to die is survived by
more than one child, one child and the issue of a predeceased
child, or the issue of two or more predeceased children.
5. Guardianship of minor
children. A will is a good place to nominate
guardians for children who are under 18 years old. If both parents
are deceased, someone will have to petition the court to become
the guardian of the children. Most people should let the court
know, through their will, who they want to serve as guardian,
rather than leaving the issue up in the air.
6. Trusts for children. A will or trust can set up a trust to provide funds
for the support, education, and other expenses for young people.
If there is no will or trust, any trust that is set up by the
court will probably end at age 18, leaving a young person with
a windfall inheritance that may soon be spent. A will or trust
can provide a much higher age for distribution of the trust,
and can also specify the terms of the trust and who the trustee
will be.
