Over half (55%) of all adult Americans do not have a will, according to a 2007 survey on estate planning conducted by Harris Interactive. Without a will, property passes by intestate succession, which means that the state decides how your property is distributed. Very few people I know are willing to let the state decide who gets their property. So why is it that so many of us haven’t made arrangements to ensure that our wishes are carried out?
One reason I hear often from potential clients is the belief that they don’t need a will because everything they own will automatically go to their spouse. This may or may not be true. Consider the following example:
Jack and Jill have been married for ten years and have no children. Jack dies unexpectedly without ever having executed a will. Jack is survived by his wife, Jill and his mother, Joan. At his death, Jack owns the following property that is titled in his sole name:
Investment Real Estate = $600,000
Car = $ 15,000
Checking Account = $ 10,000
Savings Account = $ 25,000
Stocks = $100,000
Total = $750,000
Under North Carolina law, if you are survived by your spouse and a living parent, your spouse will take a one-half interest in your real property and the first $50,000 in personal property plus one-half of the balance of the personal property. The surviving parent or parents take the remainder.
In our example above, Jill will receive a one-half interest in the real estate plus another $100,000 of the personal property. Jack’s mom, Joan will receive a one-half interest in the real estate plus the remaining $50,000 of personal property. Jill now owns real estate jointly with her mother-in-law whomshe has never been particularly close to. As you might imagine, this can create some real difficulties for both Jill and Joan.
What if Jack and Jill had a daughter, Britney, who is eight years old at Jack’s death and a son, Bobby, who is six years old at Jack’s death? Under North Carolina law, if you are survived by your spouse and two or more children, your spouse will take a one-third interest in the real property and the first $30,000 in personal property plus one-third of the balance of the personal property. The children split the remainder equally.
In our example, Jill, Britney and Bobby will each own one-third of the real estate. Britney and Bobby will each own $40,000 of the personal property and Jill will own the remainder. Unfortunately, because both Britney and Bobby are minors, their share of Jack’s estate will be held by a court appointed guardian who must file annual accounts with the court. In addition, because parents have a duty to support their children, Jill can’t use Britney and Bobby’s money for their support or education unless approved by the court. Britney and Bobby will get all of the money as soon as they turn 18 when they may not be mature enough to manage the money properly. As for the real estate, Jill will have to petition the court if she wishes to sell the real estate before Britney and Bobby turn 18.
As you can see, a will is an important legal document that allows you to control how and to whom your property passes at your death. Without a will, the state will decide this for you. A will can also be used to nominate the person who will take care of your minor children if both you and your spouse die while your children are minors. North Carolina law establishes formal requirements that must be met for a will to be valid. An experienced estate planning attorney can ensure that your wishes are carried out properly at your death.
Dori Wiggen is an attorney at Wiggen Law Group PLLC, where she focuses her practice in Estate Planning, Probate and Elder Law. Ms. Wiggen can be reached at (919) 680-0000 or email@example.com.