According to AARP, only 4 in 10 Americans have a will. Most millennials, do not have one, though the proportion of people with a will does increase as people age. It may surprise some to learn that even some extraordinarily wealthy and famous people never get around to finalizing and executing a will and die without one (this is called dying “intestate”). For example, the entertainer, Prince, who died last spring (April, 2016), left no will. Neither did Abraham Lincoln, Martin Luther King, Jr., Pablo Picasso, and Howard Hughes.
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We all have a hard time contemplating our mortality, and even those of us that know about the dangers of dying without a will, have a difficult time seeing a lawyer to make these arrangements. Last year, I represented a couple that kept rescheduling their appointment to sign their wills for a year, in spite of our continued warnings to the contrary. The wills were finalized, and sitting in a folder, but they could not bring themselves to sign them. As I said, this is a very common emotional response.
There are steps people can take to reduce some of the administrative burdens associated with dying for the family left behind to deal with these issues. Let me say first, that every person leaves an “estate” in the legal sense of the word. Some people may only have a house, a car (or two), some bank accounts and personal items. Every one of these items, in fact, every single thing you own, becomes a part of your “estate” when you die (even the clothes left in a dresser). That estate needs to be “administered” after your death. Property you own outright (as opposed to in some type of joint ownership arrangement or trust) goes through a process called “probate.” In Connecticut, this process is overseen by a Probate Court.
In two cases we are working on right now, individuals died without designating beneficiaries for certain property that would have transferred upon their death. As a result, their families have to go through the time and expense to obtain court orders to transfer title to cars, bank accounts and stocks. Although we cannot stress how important it is for everyone to have an estate plan and a will, there are steps you can take while you are working on your will to ease the burden on your family after you die:
1. Gather important documents in a folder or envelope in a safe, but accessible place. If that is a bank safe deposit box, be sure to add the name of your trusted family member to the box access list and remember to give them a key (or tell them where you keep the key to the box). Do not assume that giving someone the key to your safe deposit box will allow them to open it. Banks have specific procedures they often follow when it comes to accessing safe deposit boxes. Often, these procedures require that the other person’s name and signature be on file with the bank. Items in this folder should include:
- copy of birth certificate (if possible, a certified copy)
- Social Security Card
- military discharge paperwork
- marriage license
- divorce decree
- car title(s)
- house deed
- life insurance policies
- stock certificates
- IRA beneficiary documentation
- a list of bank accounts you hold, or copies of bank statements
- a copy of any “Totten Trust” or “Transfer on Death” designations for your accounts
- copy of your vehicle registration(s) with notarized transfer on death designation (the original(s) should remain in the car)
- investment or brokerage account statements
- account usernames and passwords for (i) bank and investment or brokerage accounts; (2) cell phone(s); and, (3) social media account(s).
If this list seems overwhelming, post it somewhere in your kitchen and tackle one item per week. Perhaps you set Monday as your “find that document day.” Check each item off the list as you obtain the document until the project is complete. It will be done before you know it.
2. Consider creating a “transfer on death” beneficiary for your bank accounts. Most banks have a form you can fill out for your checking or savings accounts that allow the bank to “pay on death,” or “transfer on death” an account. This is also sometimes called a “Totten Trust.” Enter the name of the beneficiary, their social security number and whatever other information the bank requires on their form. When you die, your beneficiary only needs to go the bank with a copy of the form and a certified copy of your death certificate to transfer the account. What if you have several children and want them each to have a share of the bank account on your death? Some banks banks’ "transfer on death" forms allow you to list multiple beneficiaries and designate a percentage for each.
3. In Connecticut, you can transfer your car without the necessity of probate. On the back of your CT VEHICLE REGISTRATION CERTIFICATE (this is what you keep in the glove box of the car), write in the name of the person to whom you want the car to go after your death. This needs to be signed in front of a notary, which can often be done at your bank. Be sure to make a copy of the registration certificate (front and back), and put it with your other important documents.
- You will need to follow this process every year (or two years) when you get a renewed registration.
- If you do not follow this process, and die without a will, someone will need to be appointed an administrator of your estate by the Probate Court in order to transfer title to your car. It is possible to do this without a lawyer, but the process is complicated, and many people end up hiring an attorney for the legal guidance they provide throughout this process.
If you did not set up a trust or use the Transfer on Death feature of your Bank Accounts, IRAs and CD’s and cars, these items pass into your estate and must go through probate, whether you have a will or not. If you do not have a will, state law determines who gets your assets, property and money after your death. Those laws are too complicated to address in this article, but they often result in the property being transferred in a way you would NOT wish it to be transferred. For example, if you are married with adult children, and want your spouse to inherit everything on your death, you will need to have a will. Without a will, in Connecticut, your spouse will only inherit the first $100,000 of the estate, and one half of the rest. The children would inherit the other half of the remainder. This is just one of many examples where the "default" provisions in the law often conflict with the wishes of the family where the decedent did not leave a will.
If you look online, you will find multiple resources that offer to help a person to make a valid simple will in Connecticut. I spent some time looking at several of these resources and have to say that I cannot recommend any of them. Estate planning is very personal to each person's unique family situation and needs. This is not an area where the "one size fits all" concept works. As you can imagine, since the person that writes a will is not around when it is reviewed, there is no way to correct it if your family discovers a problem. More than that, since there is no attorney involved when the will is created by the computer program (or online), there is no opportunity to consider some "side-effects" of various provisions.
I also find that the reason people turn to computer programs and websites to create wills is because: (1) they realize that they need wills; and, (2) they believe that attorneys cost too much. In reality, experienced attorneys can be very cost-effective by guiding you on the most appropriate estate planning approach, and offering ways to save costs for your family down the road.
Our firm has attorneys who are experienced at drafting wills and establishing trusts, which are often a very good idea to implement, because they can be crafted to avoid probate and its hassles and expenses. And if you’re in a situation where a family member has died and either named you executor of his or her estate, or died without a will, we are available to help navigate you through the probate process. Feel free to call and set up an appointment.