The government’s will – Do you have it?
Many potential clients I meet with tell me that they are "not ready" to create a will yet. For one reason or another, they are not able to commit to a decision. It is this that keeps them from creating an estate plan of any sort.
This is when I tell them that they already have a will – The Government's Will. When they look at me in disbelief, I them ask them, "Would you like to know what it says?". Of course I am being salacious but I am also telling the truth. Those of you out there that have not created your own estate plan have the Government's Will.
This is due to the laws of intestate succession. Intestate succession occurs when a person dies without a will. Without a will, the probate court looks to the default laws in order to determine how your assets are distributed. In Sonoma County, we look to the intestate laws of California.
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Sometimes the Government's Will and your intentions align and your loved ones will receive your assets as if you had prepared your own will. Many times they do not. There are many examples of this but here are a few:
Let's say you inherited your house from your parents and you and your spouse live in there. You also have two children who are in their early twenties. Most, if not all of us would want our spouse to inherit the home or at least stay there until they died or were ready to move at their own schedule. If you die with the Government's Will, only one-third of your home will go to your spouse and the other two-thirds will go directly to your children. They have the power to force the sale of the home, kick your spouse out and probably blow the money quickly. Now your spouse is without a home and only has a third of the money and your young children have squandered most of their inheritance.
Let's say you're a single person who has a very strained relationship with your family. You haven't spoken to them in months or years and they are generally unkind to you. If you die with a Government Will – it is almost guaranteed that one or more of your hated family members will receive all of your property. By creating your own will and opting out of the Government's will, you can leave your assets to your friends or a charity.
I think most people can understand that without a will, those who they want to receive their estate will not. But it gets worse.
For the select few where the Government's Will actually aligns with their own testamentary intent – consider the additional and completely avoidable costs the Government's Will makes you pay.
If you are widowed with children and you don't have a will, then your children will get your assets. But at what cost? If you had opted out of the Government's Will and created a trust, you could avoid costly probate fees. A $500,000 estate will cost you $13,000 in probate fees. If you opted out and created just a simple will, you could have avoided the cost of posting an unnecessary bond for the court. A typical surety bond can be around $2,000 a year for a $500,000 estate. The list goes on and on.
The bottom line is that we are all born with and still have a will. It is a costly and inefficient will that may leave your assets to people you don't even like. It is the Government's Will. You can opt out by calling my office and taking steps to ditch the Government's Will for something better, faster and more in line with your own wishes.