Don’t Leave Anything to Chance: Why a Will is So Important
A poll conducted by Gallup in 2016 revealed that only 44% of Americans have a will—a percentage much lower than those discovered in polls conducted in 2005 (51%) and 1990 (48%). Why do so many of us ignore such an important document?
Gallup says the likelihood of having a will depends largely on a person’s age and socioeconomic status: Sixty-eight percent of those aged 65 and older have a will, compared with just 14% of those younger than age 30. Of those who report an annual household income of $75,000 or greater, 55% have a will, compared with 31% of those with incomes of less than $30,000. And while 61% of those with a post-graduate education have a will, only 32% with a high school education or less do.
Given the relationships between age and income and having a will, Gallup says the percentage who say they have a will rises to 75% among upper-income Americans aged 55 and older.
No matter your age, education level, number of assets, or income, you should have a will in place to ensure those you love are taken care of after you’re gone. No one wants family members to be dragged through legal battles in the months after a significant loss. Make a difficult time for those you love easier by leaving detailed instructions of your wishes after death.
Why So Important?
It can all come down to a ridiculous argument over a ridiculous item.
“When a member of your family dies there’s a lot of emotion involved, and I have seen families split apart over a spoon,” says Tim Estes, CEO and founder of Estes Financial Services. Two sisters wanted possession of a single spoon that had been in their family for generations. “One sister got the spoon, and the other didn’t. They haven’t spoken for 15 years.”
Let’s face it: Life is complicated and sometimes messy. With blended families, second marriages, adopted children, pets, etc., distribution of assets can become tricky. Be honest about the makeup of your family, their future needs, and where assets should really be going.
What Happens in North Carolina?
When someone dies intestate—without a legal will—the estate goes into probate, a judicial proceeding that decides the rightful heirs and the distribution of holdings. Going through probate can eat up more money than the cost of creating a will, or result in a less fair distribution of assets.
If you die without a will in the state of North Carolina—after the payment of your debts, funeral expenses, probate, and administrative fees—the remainder of your possessions will be divided based on statutory law found in the Intestate Succession Act. Under North Carolina statutes, if you are survived by:
No spouse or children, with parent(s) living: Your entire estate will pass to and be divided equally among your parents. If only one parent is still living, then everything will pass to the living parent.
Your spouse and parents, but no children: Your spouse will receive the first $50,000.00 of personal property, one-half of the remaining personal property and one-half of all real estate. Your parent(s) will receive one-half of the remaining personal property and one-half of all real estate.
Your spouse only, no children or parents living: Your spouse will receive all property which could pass under a will.
Your spouse and one child: Your spouse will receive the first $30,000.00 of personal property, one-half of the remaining personal property and one-half all real estate. Your child will receive one-half of the remaining personal property and one-half of all real estate.
Your spouse and two or more children: Your spouse will receive the first $30,000.00 of personal property, one-third of the remaining personal property and one-third of all real estate. Your children will evenly split the remaining two-thirds of personal property and real estate.
One or more children, no spouse surviving: All of your property and possessions will be divided evenly among your children.
Neither spouse, nor children, nor parents surviving: The intestacy laws provide additional rules for distributing your assets to more remote relatives. In the event you have no other legal heirs (blood relatives), your assets will pass to the State of North Carolina (this is referred to as “escheat”).
As you can see, the Intestate Succession Act is very mechanical and orderly, but estate planning should never be a “one size fits all” proposition. Every family is unique and what works well for your loved ones won’t be the solution for just any other family.
The bottom line is this: You should have a current will in place to protect your loved ones and ensure your wishes are carried out—no matter your age. Even with no relatives to benefit, wouldn’t you rather be able to leave assets to your favorite school or local charity rather than to an account for the state of North Carolina?
A living will is also an important document to have on file as it lets family and health officials know your wishes about end of life care if you are unable to speak for yourself. You can even give a friend or family member the authority to make any healthcare decision for you (for a set time or indefinitely) with a power of attorney. As always, speak to your legal counsel to learn all your options.
For more information or to schedule a consultation, please contact Oliver & Cheek, PLLC by calling (252) 633-1930 or visiting www.olivercheek.com.
(Sources: North Carolina General Assembly; Forbes; Gallup News; Money Crashers; CNN Money; Nolo Network; and Huffington Post.)