More on Dying Intestate

In our last blog post, we discussed the importance of estate planning for millennials and mentioned that dying intestate (i.e. without a Will) is a dangerous proposition. This blog post will provide more information about dying intestate:

            So what actually happens if you die without a Will? We have provided what the “intestate Will” would look like if it were written out (provided in full form below). For your convenience, here are some of its “highlights”:

-          Predetermines legatees and distribution of monetary assets and tangible personal property (no individual preference)

-          Fails to provide for members outside of your immediate family, provided they are living

-          Fails to provide for individual preference or for efficient asset distribution to children (both when they are minors and when they reach the age of legal majority)

-          Does not allow for choice of the appointment of Personal Representative(s)

-          Does not allow for choice of the appointment of a Guardian for minor children

-          Does not account for special support circumstances

-          Potentially liquidates property of personal or familial value

-          Requires court order for funeral and burial/cremation expenses beyond a certain amount

-          Does not allow for personal preference regarding the payment of tax or debt burdens

-          Fails to provide for an unmarried partner

-          Fails to protect assets from an estranged or remarried spouse

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Last Will and Testament

of

John Smith, Intestate

 

I, John Smith, of the State of Maryland, being of sound mind and memory, do hereby publish this as my Last Will and Testament:

FIRST

If none of my children are minors, I give my spouse Fifteen Thousand Dollars ($15,000). Regardless of the age of my children, I give my wife Ten Thousand Dollars ($10,000) for her personal use as her family allowance. If I have unmarried minor children, I give each of them Five Thousand Dollars ($5,000) to the guardian of their property or a parent or grandparent with whom they live as their family allowances.

SECOND

I give one-half (1/2) of the balance of my estate to my surviving spouse and one-half (1/2) to my children.

I appoint my wife as guardian of the property of my minor children, but I acknowledge that if the assets to be distributed to a minor child of mine exceed Ten Thousand Dollars, court involvement will be required to determine how those assets will be managed.

I also ask the Orphan’s Court to determine if a performance bond should be posted to guarantee my surviving spouse or other personal representative exercises proper judgment.

As a final safeguard, my children shall have the right to review the financial records of my surviving spouse

When my children reach the age of eighteen (18) years, they shall have full rights to withdraw their respective shares of my estate.  No one shall have any right to question my children’s actions on how they decide to spend their respective shares.

THIRD

If my spouse predeceases me, I direct the court to choose a guardian for my children.  If any child has attained fourteen (14) years, the court may appoint the guardian chosen by such child.

FOURTH

Should my spouse remarry, their second spouse shall be entitled to take a one-third (1/3) share of everything my wife possesses, or a one-half (1/2) share if there are no surviving children.  The second spouse shall have the sole right to decide who is to get his/her share, even to the exclusion of my own children.

FIFTH

Under existing tax law, there are certain legitimate avenues open to me to lower death taxes.  I prefer that my estate’s assets be used for governmental purposes rather than for the benefit of my wife and children.  I direct, therefore, that no effort be made whatsoever to lower taxes so that the government may benefit substantially from my death.

SIXTH

I ask the Orphan’s Court to appoint either my wife or my children over eighteen (18) years old, as it may decide in its discretion, to handle my estate and to be my personal representative.  As a safeguard, I direct that my personal representative file a performance bond to guarantee that the personal representative do everything as should be done.

SEVENTH

Unless the Orphan’s Court approves otherwise, I direct that no funeral or burial expenses in excess of ($5,000 for a small estate or $10,000 for a large estate) be paid for my funeral or burial from my estate.

EIGHTH

I specifically disinherit any friends and other worthwhile causes because only my family members, as outlined above, will inherit my estate.

 

IN WITNESS WHEREOF, Ihave et my hand to this My Last Will and Testament this ____ day of ___________________, 20__.

 

          _________________________

 

Five Millennial Estate Planning Misconceptions

1.      “I am too young to start considering estate planning.”     

 

This is perhaps the most common estate planning misconception of millennials. Many in their 20s and 30s believe they are “untouchable” by death or incapacitation because they are in the prime of their lives; yet tragedy does not discriminate. All too often we hear of the college student with a promising future who was in a terrible car crash, of the young father suddenly befallen by a heart attack, or of some other person struck by unexpected catastrophe at all too young of an age.

It’s understandable that no one wants to think about and plan for tragedy, especially at a young age. Grappling with your own mortality is difficult, but it is important to consider the consequences if you don’t. If tragedy strikes, those closest to you will be left to make life-altering decisions, ranging from your immediate and future medical care to your family’s wellbeing. Without your estate plan in place, those charged with making these difficult decisions will be left in the dark—without your input or opinion. An estate plan obviates these uncertainties.

A well-planned estate helps protect your financial interests, personal values and well-being, primarily through three documents: a Will, a Power of Attorney, and an Advance Medical Directive. Here is a brief description of the role that each of these documents plays in your estate plan:

Will:  Your Last Will and Testament provides for various decisions on financial and non-financial concerns that arise upon your death. Common issues to provide for include:

 

-          Burial/cremation, funeral arrangements and organ donation

-          Inheritance provisions

o   How much?

o   To whom?

o   From which source?

o   On what conditions?

-          Future arrangements for minors and other dependents

-          Payment of debts and taxes

-          Appointment of the person to carry out your wishes

 

Without a Will, you die intestate, meaning that these decisions will likely be placed in the hands of a court-appointed representative. In our next blog post, we will highlight the many problems that arise when one dies intestate.

Power of Attorney (PoA): Unlike a Will, a PoA is a document that is in effect only when you are still living. Times of tragedy are often rife with financial concerns. A PoA allows for an agent to act on your behalf with regard to financial matters (contracts, debts, insurance policies, bank and brokerage accounts, etc.) during a time in which you are rendered incapacitated and therefore unable to attend to these matters on your own.

Advance Medical Directive (AMD): An AMD is, in effect, a PoA for medical decisions and should be considered an absolute necessity for anyone over the age of 18. Just like a PoA, an AMD is only effective when you are still living and puts an agent in place to make decisions for you if you are incapacitated or otherwise incapable of making your own decisions. Without an AMD, important medical decisions will be made by the attending physician without regard to your personal or religious preferences. Having an AMD in place gives the authority to make these decisions to someone who you can trust will make the right decisions on your behalf, including with regards to the admission and discharge from any health care facilities (including nursing homes), the use of pain medication, the use of artificial nutrition and hydration versus allowing natural death, etc. These decisions are extremely personal and on which most everyone has a preference.

2.      “I don’t have many assets so I have no need for a will.” 

This is a common refrain from millennials when you tell them the importance of having a Will, even at a young age. Perhaps this is just a polite way of them saying, “Leave us the **** alone,” but we believe it is our responsibility to dispel the notion that a Will is only for those that have a lot of asset. First and foremost, a will is about recognizing the relationships that you forged in your lifetime, be it with family, friends or an organization. When you die without a Will, the State pays little heed to these relationships when it administers your estate.

The financial aspect of caring for your surviving spouse, children, or aging parents undoubtedly plays a significant role in what you leave behind. You want the people you care for to be better off financially. But what if there is little you can do to improve their financial standing? Consider also the personal legacy that you leave behind with mementos of your relationships. Maybe it’s something valuable, like the house in which you raised your children; but maybe it’s something with little value, like the tattered glove that you used to play catch with your father. Everyone reading this blog post has some earthly possessions that hold particular sentimental importance not only to them but to others. Having a will prepared ensures not only your financial legacy but also your interpersonal legacy.     

3.      “I am only hurting myself by not planning my estate.” 

            False. In fact, in many cases you are probably hurt the least, and it’s your loved ones who are hurt. Not only are they left to cope with the recent loss or incapacity of their loved one, but they are also left with great uncertainty with making your medical and financial decisions, as well as dealing with many issues (court-appointed representatives, contested property, unnecessary probate, taxes and court costs) that could have easily been prevented had you planned accordingly. When someone dies intestate, their wishes are not made known, which often leads to inter-family disputes. This can be of particular consequence when dealing with the future care of minors and other dependents.  

4.      “I don’t need to pay an attorney for something I can do on my own.” 

With the rapid development of online legal services just a click away, this is quickly becoming one of the most prevalent misconceptions about estate planning. It seems like a no-brainer: Why throw away money paying a lawyer to draft these documents when you could go to sites like LegalZoom or to your local office supplies store and purchase a $50 Mad Libs-style DIY estate plan? These are arguably the most important legal documents a person can have. Are you sure you can rely on these $50 documents in the most dire of circumstances when you pay more each month for auto insurance, life insurance, and health insurance? When something seems too good to be true, it usually is just that.

Yes, these services offer you the ability to draft these documents without paying for a lawyer. While these forms allow for customization, there is no personalization. They do not and cannot understand your true wishes or reasons for planning your estate as you do. Without knowing this, they cannot possibly provide the protection you need from the various contingencies that are bound to arise.

Lawyers cost more because they do more than simply fill-in-the-blanks. They read up on evolving law and consult with fellow lawyers because estate planning is not “one size fits all.” If you believe you are the same as the Texas truck driver or New York investment banker because you all have a wife and two kids, then we suggest using LegalZoom. However, if you believe that there are intricacies or personal wishes that you wish to incorporate into you estate plan, we suggest you hire a lawyer.

5.      “I am not at a point financially where I can afford to pay a lawyer.” 

We at Oehrig & Mailman understand the struggles, financial and otherwise, that come with being a millennial trying to establish a life: a new job, a new marriage, a new house, a newborn. For these reasons, our estate planning packages are specifically tailored to ensure that your estate plan is affordable. We also offer special promotions and payment options because we want to assist families, not impoverish them. If what you have read in the blog makes you think you need to start thinking about estate planning, call us at (410) 952-8268 or email us at info@omjustice.com. We would be glad to discuss any questions you may have in a free consultation!