Do I Need a Will?

Assets can range from money and investments to real property, personal property, intellectual property, land use rights, and more. They can divide up this property, leave it to multiple heirs, order the sale, distribute the proceeds, and take any other legal action they want. Yahoo’s recent article entitled, “What Happens If I Die Without a Valid Will?” says that it is not uncommon for a will to contemplate more assets than the estate actually had at the time of death.

For instance, someone might give away $250,000 in their will but die with only $100,000 in assets. When this happens, the estate is divided up on a pro-rata basis according to the terms of the will. Therefore, someone who’d been given $125,000 in the will would receive $50,000 of the actual estate. Since their share of the will came to 50% of the estate, they receive 50% of what actually was left.

In the reverse, it’s also not uncommon for a will to contemplate fewer assets than the estate had at the time of death. This is known as “partial intestacy” and is relatively rare since most wills include a clause along the lines of “any remainder to” or “the rest to” or some other catch-all clause. This cures partial intestacy because it establishes who inherits any assets not specifically distributed. In cases of partial intestacy, the courts will distribute any remaining assets according to state law.

There are many exceptions to estate law, and the two most common exceptions to testate inheritance are:

• Marital estates – If you die while married, some or all of your assets will constitute marital assets, so they belong to you and your spouse jointly. Other assets may automatically transfer to your spouse and become marital assets after your death. Marital assets don’t transfer until after the death of both spouses.
• Evasion – If you transferred assets before your death to avoid paying your debts, those transfers can be unwound, and the assets returned to the estate—a fairly common form of tax or creditor fraud.

Reference: Yahoo (Jan. 27, 2023) “What Happens If I Die Without a Valid Will?”